What We Learned About Caplin Point Laboratories' (NSE:CAPLIPOINT) CEO Pay

Sridhar Ganesan became the CEO of Caplin Point Laboratories Limited (NSE:CAPLIPOINT) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Caplin Point Laboratories pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Caplin Point Laboratories

Comparing Caplin Point Laboratories Limited's CEO Compensation With the industry

At the time of writing, our data shows that Caplin Point Laboratories Limited has a market capitalization of ₹35b, and reported total annual CEO compensation of ₹5.7m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at ₹5.63m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₹15b and ₹58b had a median total CEO compensation of ₹23m. In other words, Caplin Point Laboratories pays its CEO lower than the industry median. What's more, Sridhar Ganesan holds ₹38m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 99% of total compensation represents salary and 1.2% is other remuneration. Caplin Point Laboratories pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Caplin Point Laboratories Limited's Growth Numbers

Over the past three years, Caplin Point Laboratories Limited has seen its earnings per share (EPS) grow by 16% per year. In the last year, its revenue is up 19%.

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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Caplin Point Laboratories Limited Been A Good Investment?

Given the total shareholder loss of 27% over three years, many shareholders in Caplin Point Laboratories Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Sridhar receives almost all of their compensation through a salary. As previously discussed, Sridhar is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But we believe shareholders would want to see healthier returns before the CEO gets a raise.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Caplin Point Laboratories (free visualization of insider trades).

Of course, you might find a fantastic investment by looking at a different set of stocks. 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.
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