Umang Vohra has been the CEO of Cipla Limited (NSE:CIPLA) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Umang Vohra’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Cipla Limited has a market cap of ₹444b, and is paying total annual CEO compensation of ₹189m. (This is based on the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹20m. We looked at a group of companies with market capitalizations from ₹284b to ₹851b, and the median CEO compensation was ₹87m.
Thus we can conclude that Umang Vohra receives more in total compensation than the median of a group of companies in the same market, and of similar size to Cipla Limited. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Cipla has changed from year to year.
Is Cipla Limited Growing?
Earnings per share at Cipla Limited are much the same as they were three years ago, albeit with a positive trend. It achieved revenue growth of 5.2% over the last year.
I’d prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.
Has Cipla Limited Been A Good Investment?
With a total shareholder return of 3.8% over three years, Cipla Limited has done okay by shareholders. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at Cipla Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Shareholders may want to check for free if Cipla insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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