We Discuss Whether Caplin Point Laboratories Limited's (NSE:CAPLIPOINT) CEO Is Due For A Pay Rise

The impressive results at Caplin Point Laboratories Limited (NSE:CAPLIPOINT) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 29 September 2022 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Caplin Point Laboratories

How Does Total Compensation For Sridhar Ganesan Compare With Other Companies In The Industry?

According to our data, Caplin Point Laboratories Limited has a market capitalization of ₹55b, and paid its CEO total annual compensation worth ₹5.6m over the year to March 2022. This means that the compensation hasn't changed much from last year. Notably, the salary which is ₹5.20m, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between ₹32b and ₹128b, we discovered that the median CEO total compensation of that group was ₹47m. That is to say, Sridhar Ganesan is paid under the industry median. What's more, Sridhar Ganesan holds ₹59m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	₹5.2m	₹5.4m	93%
Other	₹400k	₹233k	7%
Total Compensation	₹5.6m	₹5.6m	100%

Talking in terms of the industry, salary represented approximately 93% of total compensation out of all the companies we analyzed, while other remuneration made up 7% of the pie. Caplin Point Laboratories is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Caplin Point Laboratories Limited's Growth

Caplin Point Laboratories Limited has seen its earnings per share (EPS) increase by 18% a year over the past three years. In the last year, its revenue is up 17%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Caplin Point Laboratories Limited Been A Good Investment?

We think that the total shareholder return of 72%, over three years, would leave most Caplin Point Laboratories Limited shareholders smiling. 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...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

Whatever your view on compensation, you might want to check if insiders are buying or selling Caplin Point Laboratories shares (free trial).

Switching gears from Caplin Point Laboratories, 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.