Neuland Laboratories Limited's (NSE:NEULANDLAB) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Neuland Laboratories to hold its Annual General Meeting on 30th of July
• Salary of ₹37.4m is part of CEO Davuluri Rao's total remuneration
• The overall pay is 53% above the industry average
• Neuland Laboratories' EPS grew by 60% over the past three years while total shareholder return over the past three years was 984%

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Under the guidance of CEO Davuluri Rao, Neuland Laboratories Limited (NSE:NEULANDLAB) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 30th of July. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Neuland Laboratories

Comparing Neuland Laboratories Limited's CEO Compensation With The Industry

According to our data, Neuland Laboratories Limited has a market capitalization of ₹176b, and paid its CEO total annual compensation worth ₹101m over the year to March 2025. Notably, that's a decrease of 32% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹37m.

On comparing similar companies from the Indian Pharmaceuticals industry with market caps ranging from ₹86b to ₹276b, we found that the median CEO total compensation was ₹66m. Accordingly, our analysis reveals that Neuland Laboratories Limited pays Davuluri Rao north of the industry median. What's more, Davuluri Rao holds ₹4.7b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 99% of total compensation represents salary and 0.95087163% is other remuneration. Neuland Laboratories pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Neuland Laboratories Limited's Growth

Neuland Laboratories Limited has seen its earnings per share (EPS) increase by 60% a year over the past three years. Its revenue is down 5.2% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Neuland Laboratories Limited Been A Good Investment?

We think that the total shareholder return of 984%, over three years, would leave most Neuland Laboratories 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.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Neuland Laboratories that investors should look into moving forward.

Important note: Neuland Laboratories 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.