Jagarlamudi Mohan has been the CEO of Jocil Limited (NSE:JOCIL) since 1992, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Jocil
How Does Total Compensation For Jagarlamudi Mohan Compare With Other Companies In The Industry?
According to our data, Jocil Limited has a market capitalization of ā¹1.4b, and paid its CEO total annual compensation worth ā¹15m over the year to March 2020. Notably, that's an increase of 33% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ā¹5.6m.
For comparison, other companies in the industry with market capitalizations below ā¹15b, reported a median total CEO compensation of ā¹6.4m. This suggests that Jagarlamudi Mohan is paid more than the median for the industry. What's more, Jagarlamudi Mohan holds ā¹3.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | ā¹5.6m | ā¹5.6m | 38% |
| Other | ā¹9.4m | ā¹5.7m | 62% |
| Total Compensation | ā¹15m | ā¹11m | 100% |
Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. In Jocil's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Jocil Limited's Growth
Jocil Limited's earnings per share (EPS) grew 209% per year over the last three years. In the last year, its revenue is up 28%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Jocil Limited Been A Good Investment?
Since shareholders would have lost about 3.7% over three years, some Jocil Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As previously discussed, Jagarlamudi is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth is certainly impressive, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 1 which doesn't sit too well with us) in Jocil we think you should know about.
Important note: Jocil 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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About NSEI:JOCIL
Jocil
Manufactures and sells stearic acids, fatty acids, soap noodles, toilet soaps, refined glycerine, and industrial oxygen in India.
Excellent balance sheet slight.
