GHCL Limited's (NSE:GHCL) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• GHCL's Annual General Meeting to take place on 8th of July
• CEO Ravi Jalan's total compensation includes salary of ₹37.9m
• The overall pay is 334% above the industry average
• GHCL's EPS grew by 37% over the past three years while total shareholder return over the past three years was 144%

Performance at GHCL Limited (NSE:GHCL) has been reasonably good and CEO Ravi Jalan has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 8th of July, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for GHCL

How Does Total Compensation For Ravi Jalan Compare With Other Companies In The Industry?

At the time of writing, our data shows that GHCL Limited has a market capitalization of ₹54b, and reported total annual CEO compensation of ₹133m for the year to March 2024. That's a notable decrease of 11% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹38m.

For comparison, other companies in the Indian Chemicals industry with market capitalizations ranging between ₹33b and ₹133b had a median total CEO compensation of ₹31m. Accordingly, our analysis reveals that GHCL Limited pays Ravi Jalan north of the industry median. Furthermore, Ravi Jalan directly owns ₹254m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹38m	₹54m	29%
Other	₹95m	₹95m	71%
Total Compensation	₹133m	₹149m	100%

On an industry level, roughly 86% of total compensation represents salary and 14% is other remuneration. GHCL 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.

A Look at GHCL Limited's Growth Numbers

Over the past three years, GHCL Limited has seen its earnings per share (EPS) grow by 37% per year. It saw its revenue drop 24% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 GHCL Limited Been A Good Investment?

Most shareholders would probably be pleased with GHCL Limited for providing a total return of 144% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for GHCL you should be aware of, and 1 of them is a bit unpleasant.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com