We Think Gujarat Fluorochemicals Limited's (NSE:FLUOROCHEM) CEO Compensation Looks Fair

Key Insights

• Gujarat Fluorochemicals' Annual General Meeting to take place on 27th of September
• Total pay for CEO Vivek Jain includes ₹30.4m salary
• Total compensation is similar to the industry average
• Gujarat Fluorochemicals' EPS grew by 18% over the past three years while total shareholder return over the past three years was 141%

We have been pretty impressed with the performance at Gujarat Fluorochemicals Limited (NSE:FLUOROCHEM) recently and CEO Vivek Jain deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 27th of September. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Gujarat Fluorochemicals

How Does Total Compensation For Vivek Jain Compare With Other Companies In The Industry?

According to our data, Gujarat Fluorochemicals Limited has a market capitalization of ₹466b, and paid its CEO total annual compensation worth ₹182m over the year to March 2024. We note that's a decrease of 57% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹30m.

On comparing similar companies from the Indian Chemicals industry with market caps ranging from ₹334b to ₹1.0t, we found that the median CEO total compensation was ₹183m. From this we gather that Vivek Jain is paid around the median for CEOs in the industry. Furthermore, Vivek Jain directly owns ₹128m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹30m	₹16m	17%
Other	₹152m	₹412m	83%
Total Compensation	₹182m	₹428m	100%

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Gujarat Fluorochemicals sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Gujarat Fluorochemicals Limited's Growth

Gujarat Fluorochemicals Limited has seen its earnings per share (EPS) increase by 18% a year over the past three years. In the last year, its revenue is down 24%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Gujarat Fluorochemicals Limited Been A Good Investment?

We think that the total shareholder return of 141%, over three years, would leave most Gujarat Fluorochemicals 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...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Gujarat Fluorochemicals that investors should look into moving forward.

Important note: Gujarat Fluorochemicals 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.