This Is The Reason Why We Think Berger Paints India Limited's (NSE:BERGEPAINT) CEO Might Be Underpaid

The solid performance at Berger Paints India Limited (NSE:BERGEPAINT) has been impressive and shareholders will probably be pleased to know that CEO Abhijit Roy has delivered. This would be kept in mind at the upcoming AGM on 27 August 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

See our latest analysis for Berger Paints India

Comparing Berger Paints India Limited's CEO Compensation With the industry

Our data indicates that Berger Paints India Limited has a market capitalization of ₹793b, and total annual CEO compensation was reported as ₹43m for the year to March 2021. That's a modest increase of 6.7% on the prior year. Notably, the salary which is ₹27.7m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations above ₹595b, reported a median total CEO compensation of ₹73m. Accordingly, Berger Paints India pays its CEO under the industry median. What's more, Abhijit Roy holds ₹62m 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	₹28m	₹25m	64%
Other	₹15m	₹15m	36%
Total Compensation	₹43m	₹40m	100%

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. It's interesting to note that Berger Paints India allocates a smaller portion of compensation to salary in comparison to the broader industry. 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.

A Look at Berger Paints India Limited's Growth Numbers

Berger Paints India Limited has seen its earnings per share (EPS) increase by 20% a year over the past three years. Its revenue is up 38% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Berger Paints India Limited Been A Good Investment?

We think that the total shareholder return of 147%, over three years, would leave most Berger Paints India Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Berger Paints India that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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