How Much Is Savita Oil Technologies Limited (NSE:SOTL) CEO Getting Paid?

This article will reflect on the compensation paid to Gautam Mehra who has served as CEO of Savita Oil Technologies Limited (NSE:SOTL) since 2012. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Savita Oil Technologies

Comparing Savita Oil Technologies Limited's CEO Compensation With the industry

Our data indicates that Savita Oil Technologies Limited has a market capitalization of ₹9.4b, and total annual CEO compensation was reported as ₹34m for the year to March 2020. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹8.1m.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹6.5m. Hence, we can conclude that Gautam Mehra is remunerated higher than the industry median. Furthermore, Gautam Mehra directly owns ₹6.1b worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. In Savita Oil Technologies' 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.

A Look at Savita Oil Technologies Limited's Growth Numbers

Over the last three years, Savita Oil Technologies Limited has shrunk its earnings per share by 2.2% per year. It saw its revenue drop 23% over the last year.

Its a bit disappointing to see that the company has failed to grow its EPS. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Savita Oil Technologies Limited Been A Good Investment?

With a three year total loss of 54% for the shareholders, Savita Oil Technologies 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, Gautam is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Savita Oil Technologies that investors should be aware of in a dynamic business environment.

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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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