We Discuss Whether Gulshan Polyols Limited's (NSE:GULPOLY) CEO Is Due For A Pay Rise

Key Insights

• Gulshan Polyols' Annual General Meeting to take place on 29th of September
• Total pay for CEO Ashwani Vats includes ₹8.03m salary
• Total compensation is 65% below industry average
• Over the past three years, Gulshan Polyols' EPS grew by 24% and over the past three years, the total shareholder return was 419%

The solid performance at Gulshan Polyols Limited (NSE:GULPOLY) has been impressive and shareholders will probably be pleased to know that CEO Ashwani Vats has delivered. At the upcoming AGM on 29th of September, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Gulshan Polyols

How Does Total Compensation For Ashwani Vats Compare With Other Companies In The Industry?

Our data indicates that Gulshan Polyols Limited has a market capitalization of ₹14b, and total annual CEO compensation was reported as ₹8.1m for the year to March 2023. We note that's a decrease of 33% compared to last year. Notably, the salary which is ₹8.03m, represents most of the total compensation being paid.

For comparison, other companies in the Indian Chemicals industry with market capitalizations ranging between ₹8.3b and ₹33b had a median total CEO compensation of ₹23m. Accordingly, Gulshan Polyols pays its CEO under the industry median. What's more, Ashwani Vats holds ₹16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₹8.0m	₹9.5m	99%
Other	₹70k	₹2.5m	1%
Total Compensation	₹8.1m	₹12m	100%

On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. Gulshan Polyols pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Gulshan Polyols Limited's Growth

Gulshan Polyols Limited has seen its earnings per share (EPS) increase by 24% a year over the past three years. Its revenue is up 6.2% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Gulshan Polyols Limited Been A Good Investment?

We think that the total shareholder return of 419%, over three years, would leave most Gulshan Polyols Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Gulshan Polyols pays its CEO a majority of compensation through a salary. The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Gulshan Polyols (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Gulshan Polyols 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.