Here's Why Shareholders May Want To Be Cautious With Increasing Bal Pharma Limited's (NSE:BALPHARMA) CEO Pay Packet

Key Insights

• Bal Pharma will host its Annual General Meeting on 25th of September
• Salary of ₹10.2m is part of CEO Shailesh Siroya's total remuneration
• The overall pay is 113% above the industry average
• Bal Pharma's EPS grew by 5.1% over the past three years while total shareholder return over the past three years was 25%

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.

See our latest analysis for Bal Pharma

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

Our data indicates that Bal Pharma Limited has a market capitalization of ₹2.1b, and total annual CEO compensation was reported as ₹10m for the year to March 2024. Notably, that's a decrease of 17% over the year before. Notably, the salary of ₹10m is the entirety of the CEO compensation.

In comparison with other companies in the Indian Pharmaceuticals industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹4.8m. Accordingly, our analysis reveals that Bal Pharma Limited pays Shailesh Siroya north of the industry median. Moreover, Shailesh Siroya also holds ₹401m worth of Bal Pharma stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹10m	₹12m	100%
Other	-	-	-
Total Compensation	₹10m	₹12m	100%

Talking in terms of the industry, salary represented approximately 99% of total compensation out of all the companies we analyzed, while other remuneration made up 0.95087163% of the pie. On a company level, Bal Pharma prefers to reward its CEO through a salary, opting not to pay Shailesh Siroya through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Bal Pharma Limited's Growth

Bal Pharma Limited has seen its earnings per share (EPS) increase by 5.1% a year over the past three years. Its revenue is up 13% over the last year.

We think the revenue growth is good. And, while modest, the EPS growth is noticeable. Although we'll stop short of calling the stock a top performer, we think the company has potential. 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 Bal Pharma Limited Been A Good Investment?

Bal Pharma Limited has served shareholders reasonably well, with a total return of 25% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Bal Pharma rewards its CEO solely through a salary, ignoring non-salary benefits completely. 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. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are 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. In our study, we found 3 warning signs for Bal Pharma you should be aware of, and 1 of them is a bit unpleasant.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.