Our View On ICICI Lombard General Insurance's (NSE:ICICIGI) CEO Pay

Bhargav Dasgupta has been the CEO of ICICI Lombard General Insurance Company Limited (NSE:ICICIGI) since 2009, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for ICICI Lombard General Insurance

How Does Total Compensation For Bhargav Dasgupta Compare With Other Companies In The Industry?

At the time of writing, our data shows that ICICI Lombard General Insurance Company Limited has a market capitalization of ₹615b, and reported total annual CEO compensation of ₹70m for the year to March 2020. That's a notable increase of 10% on last year. We note that the salary portion, which stands at ₹44.0m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from ₹296b to ₹889b, we found that the median CEO total compensation was ₹49m. Accordingly, our analysis reveals that ICICI Lombard General Insurance Company Limited pays Bhargav Dasgupta north of the industry median. Moreover, Bhargav Dasgupta also holds ₹508m worth of ICICI Lombard General Insurance stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 63% of total compensation out of all the companies we analyzed, while other remuneration made up 37% of the pie. Our data reveals that ICICI Lombard General Insurance allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ICICI Lombard General Insurance Company Limited's Growth

ICICI Lombard General Insurance Company Limited has seen its earnings per share (EPS) increase by 19% a year over the past three years. Its revenue is up 8.0% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has ICICI Lombard General Insurance Company Limited Been A Good Investment?

Most shareholders would probably be pleased with ICICI Lombard General Insurance Company Limited for providing a total return of 95% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

As previously discussed, Bhargav is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Bhargav's performance creates value for the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for ICICI Lombard General Insurance that investors should be aware of in a dynamic business environment.

Switching gears from ICICI Lombard General Insurance, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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