Is Birla Corporation Limited’s (NSE:BIRLACORPN) CEO Pay Fair?

Bachh Nahar has been the CEO of Birla Corporation Limited (NSE:BIRLACORPN) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Birla

How Does Bachh Nahar’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Birla Corporation Limited has a market cap of ₹40b, and is paying total annual CEO compensation of ₹43m. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹13m. When we examined a selection of companies with market caps ranging from ₹14b to ₹55b, we found the median CEO total compensation was ₹21m.

It would therefore appear that Birla Corporation Limited pays Bachh Nahar more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Birla, below.

NSEI:BIRLACORPN CEO Compensation, March 21st 2019
NSEI:BIRLACORPN CEO Compensation, March 21st 2019

Is Birla Corporation Limited Growing?

Birla Corporation Limited has increased its earnings per share (EPS) by an average of 9.6% a year, over the last three years (using a line of best fit). Its revenue is up 15% over last year.

I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn’t bad, either. Although we’ll stop short of calling the stock a top performer, we think the company has potential. You might want to check this free visual report on analyst forecasts for future earnings.

Has Birla Corporation Limited Been A Good Investment?

I think that the total shareholder return of 43%, over three years, would leave most Birla Corporation 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.

In Summary…

We compared total CEO remuneration at Birla Corporation Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Birla shares with their own money (free access).

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.