Shareholders Will Most Likely Find Pidilite Industries Limited's (NSE:PIDILITIND) CEO Compensation Acceptable

Performance at Pidilite Industries Limited (NSE:PIDILITIND) has been reasonably good and CEO Bharat Puri has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 11 August 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

See our latest analysis for Pidilite Industries

Comparing Pidilite Industries Limited's CEO Compensation With the industry

At the time of writing, our data shows that Pidilite Industries Limited has a market capitalization of ₹1.2t, and reported total annual CEO compensation of ₹134m for the year to March 2021. We note that's a decrease of 54% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹57m.

In comparison with other companies in the industry with market capitalizations over ₹594b , the reported median total CEO compensation was ₹104m. From this we gather that Bharat Puri is paid around the median for CEOs in the industry. Moreover, Bharat Puri also holds ₹759m worth of Pidilite Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	₹57m	₹57m	43%
Other	₹77m	₹237m	57%
Total Compensation	₹134m	₹295m	100%

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Pidilite Industries sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Pidilite Industries Limited's Growth Numbers

Pidilite Industries Limited has seen its earnings per share (EPS) increase by 5.5% a year over the past three years. The trailing twelve months of revenue was pretty much the same as the prior period.

We generally like to see a little revenue growth, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Pidilite Industries Limited Been A Good Investment?

We think that the total shareholder return of 106%, over three years, would leave most Pidilite Industries 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.

In Summary...

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. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

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 Pidilite Industries that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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