Why We Think The CEO Of Caplin Point Laboratories Limited (NSE:CAPLIPOINT) May Soon See A Pay Rise

Key Insights

• Caplin Point Laboratories will host its Annual General Meeting on 21st of September
• CEO Sridhar Ganesan's total compensation includes salary of ₹8.30m
• Total compensation is 81% below industry average
• Caplin Point Laboratories' total shareholder return over the past three years was 83% while its EPS grew by 21% over the past three years

Shareholders will be pleased by the impressive results for Caplin Point Laboratories Limited (NSE:CAPLIPOINT) recently and CEO Sridhar Ganesan has played a key role. At the upcoming AGM on 21st of September, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for Caplin Point Laboratories

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

Our data indicates that Caplin Point Laboratories Limited has a market capitalization of ₹78b, and total annual CEO compensation was reported as ₹8.7m for the year to March 2023. We note that's an increase of 55% above last year. In particular, the salary of ₹8.30m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Pharmaceuticals industry with market capitalizations ranging from ₹33b to ₹133b, the reported median CEO total compensation was ₹47m. This suggests that Sridhar Ganesan is paid below the industry median. Moreover, Sridhar Ganesan also holds ₹94m worth of Caplin Point Laboratories stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₹8.3m	₹5.2m	95%
Other	₹400k	₹400k	5%
Total Compensation	₹8.7m	₹5.6m	100%

On an industry level, around 92% of total compensation represents salary and 8% is other remuneration. Caplin Point Laboratories has gone down a largely traditional route, paying Sridhar Ganesan a high salary, giving it preference over 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.

Caplin Point Laboratories Limited's Growth

Caplin Point Laboratories Limited has seen its earnings per share (EPS) increase by 21% a year over the past three years. It achieved revenue growth of 15% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, 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?

Boasting a total shareholder return of 83% over three years, Caplin Point Laboratories Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Caplin Point Laboratories pays its CEO a majority of compensation through a salary. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Caplin Point Laboratories.

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. 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.