This Is The Reason Why We Think Gufic Biosciences Limited's (NSE:GUFICBIO) CEO Might Be Underpaid

Shareholders will be pleased by the impressive results for Gufic Biosciences Limited (NSE:GUFICBIO) recently and CEO Pranav Choksi has played a key role. This would be kept in mind at the upcoming AGM on 20 September 2021 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.

View our latest analysis for Gufic Biosciences

Comparing Gufic Biosciences Limited's CEO Compensation With the industry

At the time of writing, our data shows that Gufic Biosciences Limited has a market capitalization of ₹19b, and reported total annual CEO compensation of ₹5.8m for the year to March 2021. That's a notable increase of 25% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹2.0m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹7.4b and ₹29b had a median total CEO compensation of ₹13m. That is to say, Pranav Choksi is paid under the industry median. What's more, Pranav Choksi holds ₹1.4b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹2.0m	₹2.0m	34%
Other	₹3.8m	₹2.6m	66%
Total Compensation	₹5.8m	₹4.7m	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. Gufic Biosciences sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Gufic Biosciences Limited's Growth

Gufic Biosciences Limited's earnings per share (EPS) grew 55% per year over the last three years. It achieved revenue growth of 112% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Gufic Biosciences Limited Been A Good Investment?

Boasting a total shareholder return of 58% over three years, Gufic Biosciences Limited has done well by shareholders. 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.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Gufic Biosciences that investors should look into moving forward.

Important note: Gufic Biosciences is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.
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