Bal Pharma Limited's (NSE:BALPHARMA) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Bal Pharma to hold its Annual General Meeting on 25th of September
• CEO Shailesh Siroya's total compensation includes salary of ₹12.2m
• Total compensation is 148% above industry average
• Bal Pharma's EPS grew by 63% over the past three years while total shareholder return over the past three years was 117%

Under the guidance of CEO Shailesh Siroya, Bal Pharma Limited (NSE:BALPHARMA) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25th of September. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Bal Pharma

How Does Total Compensation For Shailesh Siroya Compare With Other Companies In The Industry?

At the time of writing, our data shows that Bal Pharma Limited has a market capitalization of ₹1.5b, and reported total annual CEO compensation of ₹12m for the year to March 2023. We note that's an increase of 20% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹12m.

On comparing similar-sized companies in the Indian Pharmaceuticals industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹4.9m. Hence, we can conclude that Shailesh Siroya is remunerated higher than the industry median. What's more, Shailesh Siroya holds ₹292m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₹12m	₹10m	100%
Other	-	-	-
Total Compensation	₹12m	₹10m	100%

Speaking on an industry level, nearly 92% of total compensation represents salary, while the remainder of 8% is other remuneration. At the company level, Bal Pharma pays Shailesh Siroya solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Bal Pharma Limited's Growth Numbers

Over the past three years, Bal Pharma Limited has seen its earnings per share (EPS) grow by 63% per year. Its revenue is up 8.8% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bal Pharma Limited Been A Good Investment?

Boasting a total shareholder return of 117% over three years, Bal Pharma Limited has done well by shareholders. 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.

In Summary...

Bal Pharma 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. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 1 which can't be ignored) in Bal Pharma we think you should know about.

Switching gears from Bal Pharma, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.