Shareholders Will Probably Hold Off On Increasing Atul Ltd's (NSE:ATUL) CEO Compensation For The Time Being

Under the guidance of CEO Sunil Lalbhai, Atul Ltd (NSE:ATUL) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 30 July 2021. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Atul

How Does Total Compensation For Sunil Lalbhai Compare With Other Companies In The Industry?

At the time of writing, our data shows that Atul Ltd has a market capitalization of ₹274b, and reported total annual CEO compensation of ₹140m for the year to March 2021. We note that's an increase of 16% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹56m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹149b and ₹476b had a median total CEO compensation of ₹73m. This suggests that Sunil Lalbhai is paid more than the median for the industry. What's more, Sunil Lalbhai holds ₹1.2b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹56m	₹39m	40%
Other	₹84m	₹81m	60%
Total Compensation	₹140m	₹120m	100%

On an industry level, roughly 88% of total compensation represents salary and 12% is other remuneration. In Atul's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Atul Ltd's Growth

Over the past three years, Atul Ltd has seen its earnings per share (EPS) grow by 33% per year. It saw its revenue drop 8.8% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Atul Ltd Been A Good Investment?

Boasting a total shareholder return of 242% over three years, Atul Ltd has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Atul.

Important note: Atul is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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