Increases to CEO Compensation Might Be Put On Hold For Now at HIL Limited (NSE:HIL)

Under the guidance of CEO Dhirup Choudhary, HIL Limited (NSE:HIL) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 30 July 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for HIL

How Does Total Compensation For Dhirup Choudhary Compare With Other Companies In The Industry?

Our data indicates that HIL Limited has a market capitalization of ₹35b, and total annual CEO compensation was reported as ₹46m for the year to March 2021. We note that's an increase of 13% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹46m.

In comparison with other companies in the industry with market capitalizations ranging from ₹15b to ₹60b, the reported median CEO total compensation was ₹28m. Hence, we can conclude that Dhirup Choudhary is remunerated higher than the industry median. What's more, Dhirup Choudhary holds ₹70m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹46m	₹41m	100%
Other	-	-	-
Total Compensation	₹46m	₹41m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. On a company level, HIL prefers to reward its CEO through a salary, opting not to pay Dhirup Choudhary through non-salary benefits. 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 HIL Limited's Growth Numbers

HIL Limited has seen its earnings per share (EPS) increase by 38% a year over the past three years. It achieved revenue growth of 19% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has HIL Limited Been A Good Investment?

We think that the total shareholder return of 144%, over three years, would leave most HIL Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

HIL rewards its CEO solely through a salary, ignoring non-salary benefits completely. Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 4 warning signs for HIL that investors should look into moving forward.

Important note: HIL 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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