Increases to Bodal Chemicals Limited's (NSE:BODALCHEM) CEO Compensation Might Cool off for now

Performance at Bodal Chemicals Limited (NSE:BODALCHEM) has been reasonably good and CEO Sureshbhai Patel has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 26 September 2022. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Bodal Chemicals

How Does Total Compensation For Sureshbhai Patel Compare With Other Companies In The Industry?

According to our data, Bodal Chemicals Limited has a market capitalization of ₹11b, and paid its CEO total annual compensation worth ₹74m over the year to March 2022. Notably, that's an increase of 98% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹16m.

On comparing similar-sized companies in the industry with market capitalizations below ₹16b, we found that the median total CEO compensation was ₹6.8m. This suggests that Sureshbhai Patel is paid more than the median for the industry. Moreover, Sureshbhai Patel also holds ₹3.9b worth of Bodal Chemicals stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	₹16m	₹16m	22%
Other	₹58m	₹21m	78%
Total Compensation	₹74m	₹37m	100%

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. It's interesting to note that Bodal Chemicals allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Bodal Chemicals Limited's Growth Numbers

Over the last three years, Bodal Chemicals Limited has shrunk its earnings per share by 7.4% per year. Its revenue is up 36% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bodal Chemicals Limited Been A Good Investment?

With a total shareholder return of 10% over three years, Bodal Chemicals Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Although the company has performed relatively well, we still think there are some areas that could be improved. Until EPS growth picks back up, we think shareholders may find it hard to justify increasing CEO pay given that they are already paid above industry average.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which don't sit too well with us) in Bodal Chemicals we think you should know about.

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.