Increases to CEO Compensation Might Be Put On Hold For Now at Savita Oil Technologies Limited (NSE:SOTL)

Under the guidance of CEO Gautam Mehra, Savita Oil Technologies Limited (NSE:SOTL) has performed reasonably well recently. As shareholders go into the upcoming AGM on 29 September 2022, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See 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 ₹22b, and total annual CEO compensation was reported as ₹60m for the year to March 2022. We note that's an increase of 15% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹9.8m.

In comparison with other companies in the industry with market capitalizations ranging from ₹8.0b to ₹32b, the reported median CEO total compensation was ₹18m. Accordingly, our analysis reveals that Savita Oil Technologies Limited pays Gautam Mehra north of the industry median. Furthermore, Gautam Mehra directly owns ₹14b worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. In Savita Oil Technologies' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Savita Oil Technologies Limited's Growth Numbers

Savita Oil Technologies Limited's earnings per share (EPS) grew 31% per year over the last three years. It achieved revenue growth of 42% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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?

Boasting a total shareholder return of 79% over three years, Savita Oil Technologies Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Savita Oil Technologies that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.