Should You Worry About Southern Petrochemical Industries Corporation Limited’s (NSE:SPIC) CEO Pay?

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The CEO of Southern Petrochemical Industries Corporation Limited (NSE:SPIC) is Sllaipillayarputhur Ramakrishnan. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Southern Petrochemical Industries

How Does Sllaipillayarputhur Ramakrishnan’s Compensation Compare With Similar Sized Companies?

According to our data, Southern Petrochemical Industries Corporation Limited has a market capitalization of ₹4.3b, and pays its CEO total annual compensation worth ₹6.9m. (This figure is for the year to March 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at ₹4.8m. We examined a group of similar sized companies, with market capitalizations of below ₹14b. The median CEO total compensation in that group is ₹1.3m.

As you can see, Sllaipillayarputhur Ramakrishnan is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Southern Petrochemical Industries Corporation Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Southern Petrochemical Industries, below.

NSEI:SPIC CEO Compensation, July 19th 2019
NSEI:SPIC CEO Compensation, July 19th 2019

Is Southern Petrochemical Industries Corporation Limited Growing?

On average over the last three years, Southern Petrochemical Industries Corporation Limited has grown earnings per share (EPS) by 29% each year (using a line of best fit). In the last year, its revenue is up 30%.

This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.

Has Southern Petrochemical Industries Corporation Limited Been A Good Investment?

Since shareholders would have lost about 8.0% over three years, some Southern Petrochemical Industries Corporation Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared the total CEO remuneration paid by Southern Petrochemical Industries Corporation Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. So you may want to check if insiders are buying Southern Petrochemical Industries shares with their own money (free access).

If you want to buy a stock that is better than Southern Petrochemical Industries, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.