How Should Investors React To Camlin Fine Sciences' (NSE:CAMLINFINE) CEO Pay?

Ashish Dandekar has been the CEO of Camlin Fine Sciences Limited (NSE:CAMLINFINE) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Camlin Fine Sciences pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Camlin Fine Sciences

Comparing Camlin Fine Sciences Limited's CEO Compensation With the industry

Our data indicates that Camlin Fine Sciences Limited has a market capitalization of ₹15b, and total annual CEO compensation was reported as ₹18m for the year to March 2020. We note that's a small decrease of 5.0% on last year. In particular, the salary of ₹11.2m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between ₹7.4b and ₹29b, we discovered that the median CEO total compensation of that group was ₹22m. So it looks like Camlin Fine Sciences compensates Ashish Dandekar in line with the median for the industry. What's more, Ashish Dandekar holds ₹1.6b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. In Camlin Fine Sciences' case, non-salary compensation represents a greater slice of total remuneration, 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 Camlin Fine Sciences Limited's Growth Numbers

Camlin Fine Sciences Limited's earnings per share (EPS) grew 108% per year over the last three years. In the last year, its revenue is up 14%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing 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 Camlin Fine Sciences Limited Been A Good Investment?

With a total shareholder return of 3.6% over three years, Camlin Fine Sciences Limited has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As previously discussed, Ashish is compensated close to the median for companies of its size, and which belong to the same industry. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Camlin Fine Sciences you should be aware of, and 1 of them doesn't sit too well with us.

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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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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