What Does Vinati Organics' (NSE:VINATIORGA) CEO Pay Reveal?

This article will reflect on the compensation paid to Vinati Mutreja who has served as CEO of Vinati Organics Limited (NSE:VINATIORGA) since 2018. 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 Vinati Organics

How Does Total Compensation For Vinati Mutreja Compare With Other Companies In The Industry?

According to our data, Vinati Organics Limited has a market capitalization of ₹118b, and paid its CEO total annual compensation worth ₹11m over the year to March 2020. Notably, that's an increase of 9.9% over the year before. We note that the salary portion, which stands at ₹9.67m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from ₹74b to ₹236b, the reported median CEO total compensation was ₹50m. That is to say, Vinati Mutreja is paid under the industry median. What's more, Vinati Mutreja holds ₹1.4b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 90% of total compensation represents salary and 10% is other remuneration. Vinati Organics is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Vinati Organics Limited's Growth

Vinati Organics Limited has seen its earnings per share (EPS) increase by 28% a year over the past three years. It saw its revenue drop 19% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Vinati Organics Limited Been A Good Investment?

We think that the total shareholder return of 134%, over three years, would leave most Vinati Organics 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.

To Conclude...

As previously discussed, Vinati is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Vinati deserves a raise!

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Vinati Organics that investors should be aware of in a dynamic business environment.

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. 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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