Here's What We Think About ICICI Prudential Life Insurance's (NSE:ICICIPRULI) CEO Pay

Narayanan Kannan became the CEO of ICICI Prudential Life Insurance Company Limited (NSE:ICICIPRULI) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether ICICI Prudential Life Insurance pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for ICICI Prudential Life Insurance

Comparing ICICI Prudential Life Insurance Company Limited's CEO Compensation With the industry

At the time of writing, our data shows that ICICI Prudential Life Insurance Company Limited has a market capitalization of ₹689b, and reported total annual CEO compensation of ₹49m for the year to March 2020. We note that's an increase of 12% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹24m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹294b and ₹882b had a median total CEO compensation of ₹49m. So it looks like ICICI Prudential Life Insurance compensates Narayanan Kannan in line with the median for the industry. Furthermore, Narayanan Kannan directly owns ₹97m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 52% of total compensation represents salary and 48% is other remuneration. Although there is a difference in how total compensation is set, ICICI Prudential Life Insurance more or less reflects the market in terms of setting the salary. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ICICI Prudential Life Insurance Company Limited's Growth

ICICI Prudential Life Insurance Company Limited has reduced its earnings per share by 14% a year over the last three years. In the last year, its revenue changed by just 0.2%.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has ICICI Prudential Life Insurance Company Limited Been A Good Investment?

ICICI Prudential Life Insurance Company Limited has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we touched on above, ICICI Prudential Life Insurance Company Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. ICICI Prudential Life Insurance has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. This doesn't compare well with CEO compensation, which is largely in line with the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for ICICI Prudential Life Insurance that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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