This Is The Reason Why We Think Marksans Pharma Limited's (NSE:MARKSANS) CEO Deserves A Bump Up To Their Compensation

The impressive results at Marksans Pharma Limited (NSE:MARKSANS) recently will be great news for shareholders. At the upcoming AGM on 23 September 2021, 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. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

View our latest analysis for Marksans Pharma

How Does Total Compensation For Mark Saldanha Compare With Other Companies In The Industry?

According to our data, Marksans Pharma Limited has a market capitalization of ₹29b, and paid its CEO total annual compensation worth ₹10m over the year to March 2021. This was the same amount the CEO received in the prior year. Notably, the salary which is ₹9.60m, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between ₹15b and ₹59b, we discovered that the median CEO total compensation of that group was ₹28m. Accordingly, Marksans Pharma pays its CEO under the industry median. Moreover, Mark Saldanha also holds ₹14b worth of Marksans Pharma stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	₹9.6m	₹9.6m	92%
Other	₹832k	₹832k	8%
Total Compensation	₹10m	₹10m	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 1% of the pie. Our data reveals that Marksans Pharma allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Marksans Pharma Limited's Growth Numbers

Marksans Pharma Limited has seen its earnings per share (EPS) increase by 80% a year over the past three years. Its revenue is up 15% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Marksans Pharma Limited Been A Good Investment?

Most shareholders would probably be pleased with Marksans Pharma Limited for providing a total return of 104% over three years. 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...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Marksans Pharma that you should be aware of before investing.

Important note: Marksans Pharma 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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