Does Alpa Laboratories Limited's (NSE:ALPA) CEO Salary Compare Well With Others?

The CEO of Alpa Laboratories Limited (NSE:ALPA) is Paresh Chawla. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Alpa Laboratories

How Does Paresh Chawla's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Alpa Laboratories Limited has a market cap of ₹388m, and reported total annual CEO compensation of ₹8.4m for the year to March 2019. Notably, the salary of ₹8.4m is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under ₹15b, and the median CEO total compensation was ₹3.8m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Alpa Laboratories. Talking in terms of the sector, salary represented approximately 99% of total compensation out of all the companies we analysed, while other remuneration made up 0.6% of the pie. Speaking on a company level, Alpa Laboratories prefers to tread along a traditional path, disbursing all compensation through a salary.

It would therefore appear that Alpa Laboratories Limited pays Paresh Chawla more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at Alpa Laboratories has changed from year to year.

Is Alpa Laboratories Limited Growing?

On average over the last three years, Alpa Laboratories Limited has shrunk earnings per share by 52% each year (measured with a line of best fit). In the last year, its revenue is up 17%.

Few shareholders would be pleased to read that earnings per share are lower over 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. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Alpa Laboratories Limited Been A Good Investment?

With a three year total loss of 48%, Alpa Laboratories Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Alpa Laboratories Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! Taking a breather from CEO compensation, we've spotted 4 warning signs for Alpa Laboratories (of which 1 can't be ignored!) you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking elsewhere. 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. Thank you for reading.