Increases to CEO Compensation Might Be Put On Hold For Now at Shilpa Medicare Limited (NSE:SHILPAMED)

Performance at Shilpa Medicare Limited (NSE:SHILPAMED) has been reasonably good and CEO Vishnukanth Bhutada has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28 September 2022. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Shilpa Medicare

Comparing Shilpa Medicare Limited's CEO Compensation With The Industry

According to our data, Shilpa Medicare Limited has a market capitalization of ₹33b, and paid its CEO total annual compensation worth ₹97m over the year to March 2022. There was no change in the compensation compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹16m.

On examining similar-sized companies in the industry with market capitalizations between ₹16b and ₹64b, we discovered that the median CEO total compensation of that group was ₹25m. Accordingly, our analysis reveals that Shilpa Medicare Limited pays Vishnukanth Bhutada north of the industry median. What's more, Vishnukanth Bhutada holds ₹3.0b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	₹16m	₹16m	16%
Other	₹81m	₹81m	84%
Total Compensation	₹97m	₹97m	100%

Talking in terms of the industry, salary represented approximately 94% of total compensation out of all the companies we analyzed, while other remuneration made up 6% of the pie. In Shilpa Medicare's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Shilpa Medicare Limited's Growth Numbers

Over the last three years, Shilpa Medicare Limited has shrunk its earnings per share by 16% per year. It achieved revenue growth of 28% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Shilpa Medicare Limited Been A Good Investment?

Boasting a total shareholder return of 33% over three years, Shilpa Medicare 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.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their 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 1 warning sign for Shilpa Medicare that investors should look into moving forward.

Important note: Shilpa Medicare 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.