Here's Why It's Unlikely That Jubilant Pharmova Limited's (NSE:JUBLPHARMA) CEO Will See A Pay Rise This Year

Jubilant Pharmova Limited (NSE:JUBLPHARMA) has not performed well recently and CEO Hari Shanker Bhartia will probably need to up their game. At the upcoming AGM on 22 September 2021, shareholders can hear from the board including their plans for turning around performance. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Jubilant Pharmova

Comparing Jubilant Pharmova Limited's CEO Compensation With the industry

Our data indicates that Jubilant Pharmova Limited has a market capitalization of ₹99b, and total annual CEO compensation was reported as ₹122m for the year to March 2021. We note that's a small decrease of 3.1% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹27m.

On examining similar-sized companies in the industry with market capitalizations between ₹74b and ₹236b, we discovered that the median CEO total compensation of that group was ₹49m. Hence, we can conclude that Hari Shanker Bhartia is remunerated higher than the industry median. What's more, Hari Shanker Bhartia holds ₹231m 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	₹27m	₹27m	22%
Other	₹95m	₹99m	78%
Total Compensation	₹122m	₹126m	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. It's interesting to note that Jubilant Pharmova allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Jubilant Pharmova Limited's Growth

Jubilant Pharmova Limited saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is down 26%.

The lack of EPS growth is certainly uninspiring. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Jubilant Pharmova Limited Been A Good Investment?

Given the total shareholder loss of 14% over three years, many shareholders in Jubilant Pharmova Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Jubilant Pharmova that you should be aware of before investing.

Important note: Jubilant Pharmova 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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