This Is Why Glenmark Pharmaceuticals Limited's (NSE:GLENMARK) CEO Compensation Looks Appropriate

Key Insights

• Glenmark Pharmaceuticals' Annual General Meeting to take place on 27th of September
• Salary of ₹134.9m is part of CEO Glenn Saldanha's total remuneration
• The overall pay is comparable to the industry average
• Glenmark Pharmaceuticals' total shareholder return over the past three years was 226% while its EPS was down 108% over the past three years

The share price of Glenmark Pharmaceuticals Limited (NSE:GLENMARK) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 27th of September. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Glenmark Pharmaceuticals

Comparing Glenmark Pharmaceuticals Limited's CEO Compensation With The Industry

Our data indicates that Glenmark Pharmaceuticals Limited has a market capitalization of ₹462b, and total annual CEO compensation was reported as ₹169m for the year to March 2024. That's just a smallish increase of 4.2% on last year. We note that the salary portion, which stands at ₹134.9m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Indian Pharmaceuticals industry with market capitalizations ranging between ₹334b and ₹1.0t had a median total CEO compensation of ₹154m. So it looks like Glenmark Pharmaceuticals compensates Glenn Saldanha in line with the median for the industry. What's more, Glenn Saldanha holds ₹1.6b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹135m	₹130m	80%
Other	₹34m	₹32m	20%
Total Compensation	₹169m	₹162m	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 0.92215326% of the pie. Glenmark Pharmaceuticals sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Glenmark Pharmaceuticals Limited's Growth

Glenmark Pharmaceuticals Limited has reduced its earnings per share by 108% a year over the last three years. It saw its revenue drop 5.5% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Glenmark Pharmaceuticals Limited Been A Good Investment?

We think that the total shareholder return of 226%, over three years, would leave most Glenmark Pharmaceuticals 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...

Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

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

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.