We Think The Compensation For Sumitomo Chemical India Limited's (NSE:SUMICHEM) CEO Looks About Right

Key Insights

• Sumitomo Chemical India's Annual General Meeting to take place on 4th of August
• Total pay for CEO Chetan Shah includes ₹89.1m salary
• The total compensation is similar to the average for the industry
• Sumitomo Chemical India's total shareholder return over the past three years was 34% while its EPS grew by 6.1% over the past three years

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Performance at Sumitomo Chemical India Limited (NSE:SUMICHEM) has been reasonably good and CEO Chetan Shah has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 4th of August. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for Sumitomo Chemical India

How Does Total Compensation For Chetan Shah Compare With Other Companies In The Industry?

According to our data, Sumitomo Chemical India Limited has a market capitalization of ₹290b, and paid its CEO total annual compensation worth ₹89m over the year to March 2025. That's a fairly small increase of 7.0% over the previous year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹89m.

For comparison, other companies in the Indian Chemicals industry with market capitalizations ranging between ₹173b and ₹555b had a median total CEO compensation of ₹73m. From this we gather that Chetan Shah is paid around the median for CEOs in the industry.

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. On a company level, Sumitomo Chemical India prefers to reward its CEO through a salary, opting not to pay Chetan Shah through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Sumitomo Chemical India Limited's Growth Numbers

Over the past three years, Sumitomo Chemical India Limited has seen its earnings per share (EPS) grow by 6.1% per year. In the last year, its revenue is up 11%.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Sumitomo Chemical India Limited Been A Good Investment?

Boasting a total shareholder return of 34% over three years, Sumitomo Chemical India 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...

Sumitomo Chemical India pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed 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.

So you may want to check if insiders are buying Sumitomo Chemical India shares with their own money (free access).

Important note: Sumitomo Chemical India 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. 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.