What We Learned About Gulf Oil Lubricants India's (NSE:GULFOILLUB) CEO Pay

This article will reflect on the compensation paid to Ravi Chawla who has served as CEO of Gulf Oil Lubricants India Limited (NSE:GULFOILLUB) since 2014. This analysis will also assess whether Gulf Oil Lubricants India pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Gulf Oil Lubricants India

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

According to our data, Gulf Oil Lubricants India Limited has a market capitalization of ₹36b, and paid its CEO total annual compensation worth ₹92m over the year to March 2020. That's a notable increase of 93% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹24m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹15b and ₹59b had a median total CEO compensation of ₹18m. Accordingly, our analysis reveals that Gulf Oil Lubricants India Limited pays Ravi Chawla north of the industry median. Moreover, Ravi Chawla also holds ₹78m worth of Gulf Oil Lubricants India stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Gulf Oil Lubricants India sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Gulf Oil Lubricants India Limited's Growth

Gulf Oil Lubricants India Limited's earnings per share (EPS) grew 6.9% per year over the last three years. In the last year, its revenue is down 18%.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Gulf Oil Lubricants India Limited Been A Good Investment?

With a three year total loss of 23% for the shareholders, Gulf Oil Lubricants India Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Ravi is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. The growth in the business has been uninspiring, but the shareholder returns for Gulf Oil Lubricants India have arguably been worse, over the last three years. This doesn't look good when you see that Ravi is earning more than the industry median. All things considered, we believe shareholders would be disappointed to see Ravi's compensation grow without first seeing an improvement in the performance of the company.

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. That's why we did some digging and identified 2 warning signs for Gulf Oil Lubricants India that you should be aware of before investing.

Important note: Gulf Oil Lubricants 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. 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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