Tarminder Parmar became the CEO of Albert David Limited (NSE:ALBERTDAVD) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. 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 Albert David
How Does Total Compensation For Tarminder Parmar Compare With Other Companies In The Industry?
Our data indicates that Albert David Limited has a market capitalization of ₹2.4b, and total annual CEO compensation was reported as ₹22m for the year to March 2020. That's a notable increase of 15% on last year. Notably, the salary which is ₹20.9m, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹3.1m. This suggests that Tarminder Parmar is paid more than the median for the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | ₹21m | ₹18m | 94% |
| Other | ₹1.2m | ₹1.5m | 6% |
| Total Compensation | ₹22m | ₹19m | 100% |
Speaking on an industry level, nearly 99% of total compensation represents salary, while the remainder of 1.3% is other remuneration. There isn't a significant difference between Albert David and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Albert David Limited's Growth
Albert David Limited's earnings per share (EPS) grew 4.0% per year over the last three years. In the last year, its revenue is up 1.2%.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. 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 Albert David Limited Been A Good Investment?
Boasting a total shareholder return of 48% over three years, Albert David 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.
In Summary...
As we touched on above, Albert David Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Still, shareholder returns for the company are very impressive for the last three years. On the other hand, EPS growth — over the same period — is not as impressive. We'd ideally want to see higher EPS growth, but CEO compensation seems to be within reason, given high shareholder returns.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for Albert David that investors should look into moving forward.
Important note: Albert David 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.
If you’re looking to trade Albert David, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
About NSEI:ALBERTDAVD
Albert David
Manufactures and trades in pharmaceutical formulations, infusion solutions, herbal dosage forms, and bulk drugs in India.
Flawless balance sheet average dividend payer.
