What We Learned About GOCL's (NSE:GOCLCORP) CEO Compensation

This article will reflect on the compensation paid to Subhas Pramanik who has served as CEO of GOCL Corporation Limited (NSE:GOCLCORP) since 2005. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for GOCL

How Does Total Compensation For Subhas Pramanik Compare With Other Companies In The Industry?

At the time of writing, our data shows that GOCL Corporation Limited has a market capitalization of ₹12b, and reported total annual CEO compensation of ₹17m for the year to March 2020. That's a fairly small increase of 6.2% over the previous year. Notably, the salary which is ₹11.6m, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from ₹7.2b to ₹29b, we found that the median CEO total compensation was ₹19m. From this we gather that Subhas Pramanik is paid around the median for CEOs in the industry. What's more, Subhas Pramanik holds ₹2.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. GOCL sets aside a smaller share of compensation for salary, in comparison to the overall 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 GOCL Corporation Limited's Growth Numbers

GOCL Corporation Limited has seen its earnings per share (EPS) increase by 23% a year over the past three years. Its revenue is down 17% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has GOCL Corporation Limited Been A Good Investment?

Given the total shareholder loss of 57% over three years, many shareholders in GOCL Corporation Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Subhas is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But on the bright side, EPS growth is positive over the same period. Overall, we wouldn't say Subhas is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

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 2 warning signs for GOCL you should be aware of, and 1 of them is a bit concerning.

Important note: GOCL 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. 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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