What Can We Conclude About Marksans Pharma's (NSE:MARKSANS) CEO Pay?

Mark Saldanha is the CEO of Marksans Pharma Limited (NSE:MARKSANS), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Marksans Pharma

Comparing Marksans Pharma Limited's CEO Compensation With the industry

Our data indicates that Marksans Pharma Limited has a market capitalization of ₹26b, and total annual CEO compensation was reported as ₹10m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of ₹9.60m, makes up a huge portion of the total compensation being paid to the CEO.

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 ₹21m. In other words, Marksans Pharma pays its CEO lower than the industry median. Furthermore, Mark Saldanha directly owns ₹13b worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 99% of total compensation represents salary, while the remainder of 1.2% is other remuneration. Marksans Pharma is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Marksans Pharma Limited's Growth

Marksans Pharma Limited has seen its earnings per share (EPS) increase by 84% a year over the past three years. In the last year, its revenue is up 32%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Marksans Pharma Limited Been A Good Investment?

Boasting a total shareholder return of 70% over three years, Marksans Pharma Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As previously discussed, Mark is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Mark deserves a raise!

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 1 warning sign 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. 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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