The CEO of Alkem Laboratories Limited (NSE:ALKEM) is Dhananjay Singh. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Dhananjay Singh’s Compensation Compare With Similar Sized Companies?
Our data indicates that Alkem Laboratories Limited is worth ₹206b, and total annual CEO compensation is ₹42m. (This figure is for the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at ₹36m. We looked at a group of companies with market capitalizations from ₹139b to ₹444b, and the median CEO total compensation was ₹42m.
That means Dhananjay Singh receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Alkem Laboratories, below.
Is Alkem Laboratories Limited Growing?
On average over the last three years, Alkem Laboratories Limited has shrunk earnings per share by 6.4% each year (measured with a line of best fit). It achieved revenue growth of 17% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And while it’s good to see some good revenue growth recently, the growth isn’t really fast enough for me to put aside my concerns around earnings. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.
Has Alkem Laboratories Limited Been A Good Investment?
Most shareholders would probably be pleased with Alkem Laboratories Limited for providing a total return of 43% over three years. 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.
Dhananjay Singh is paid around what is normal the leaders of comparable size companies.
We feel that earnings per share have been a bit disappointing, but it’s nice to see positive shareholder returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. Shareholders may want to check for free if Alkem Laboratories insiders are buying or selling shares.
If you want to buy a stock that is better than Alkem Laboratories, this free list of high return, low debt companies is a great place to look.
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