In 2014 Ravi Chawla was appointed CEO of Gulf Oil Lubricants India Limited (NSE:GULFOILLUB). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Ravi Chawla’s Compensation Compare With Similar Sized Companies?
According to our data, Gulf Oil Lubricants India Limited has a market capitalization of ₹39b, and pays its CEO total annual compensation worth ₹40m. (This figure is for the year to 2018). While we always look at total compensation first, we note that the salary component is less, at ₹19m. When we examined a selection of companies with market caps ranging from ₹14b to ₹58b, we found the median CEO compensation was ₹21m.
As you can see, Ravi Chawla is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Gulf Oil Lubricants India Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Gulf Oil Lubricants India has changed from year to year.
Is Gulf Oil Lubricants India Limited Growing?
Over the last three years Gulf Oil Lubricants India Limited has grown its earnings per share (EPS) by an average of 22% per year. It achieved revenue growth of 28% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Gulf Oil Lubricants India Limited Been A Good Investment?
Most shareholders would probably be pleased with Gulf Oil Lubricants India Limited for providing a total return of 64% over three years. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
We examined the amount Gulf Oil Lubricants India Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Gulf Oil Lubricants India insiders are buying or selling shares.
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.