Why We Think The CEO Of E.I.D.- Parry (India) Limited (NSE:EIDPARRY) May Soon See A Pay Rise

The solid performance at E.I.D.- Parry (India) Limited (NSE:EIDPARRY) has been impressive and shareholders will probably be pleased to know that CEO S. Suresh has delivered. This would be kept in mind at the upcoming AGM on 16 September 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. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for E.I.D.- Parry (India)

Comparing E.I.D.- Parry (India) Limited's CEO Compensation With the industry

At the time of writing, our data shows that E.I.D.- Parry (India) Limited has a market capitalization of ₹72b, and reported total annual CEO compensation of ₹21m for the year to March 2021. That's a notable increase of 19% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹7.0m.

On comparing similar companies from the same industry with market caps ranging from ₹30b to ₹118b, we found that the median CEO total compensation was ₹31m. Accordingly, E.I.D.- Parry (India) pays its CEO under the industry median.

Component	2021	2020	Proportion (2021)
Salary	₹7.0m	₹6.8m	34%
Other	₹14m	₹11m	66%
Total Compensation	₹21m	₹18m	100%

On an industry level, roughly 88% of total compensation represents salary and 12% is other remuneration. E.I.D.- Parry (India) pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at E.I.D.- Parry (India) Limited's Growth Numbers

E.I.D.- Parry (India) Limited has seen its earnings per share (EPS) increase by 99% a year over the past three years. Its revenue is up 3.6% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has E.I.D.- Parry (India) Limited Been A Good Investment?

We think that the total shareholder return of 94%, over three years, would leave most E.I.D.- Parry (India) Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at 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.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at E.I.D.- Parry (India).

Important note: E.I.D.- Parry (India) 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. 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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