What Did Wockhardt's (NSE:WOCKPHARMA) CEO Take Home Last Year?

Murtaza Khorakiwala has been the CEO of Wockhardt Limited (NSE:WOCKPHARMA) since 2009, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Wockhardt.

Check out our latest analysis for Wockhardt

How Does Total Compensation For Murtaza Khorakiwala Compare With Other Companies In The Industry?

Our data indicates that Wockhardt Limited has a market capitalization of ₹50b, and total annual CEO compensation was reported as ₹24m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹24m.

On comparing similar companies from the same industry with market caps ranging from ₹30b to ₹118b, we found that the median CEO total compensation was ₹48m. This suggests that Murtaza Khorakiwala is paid below the industry median. Moreover, Murtaza Khorakiwala also holds ₹105m worth of Wockhardt stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 99% of total compensation represents salary, while the remainder of 1.3% is other remuneration. At the company level, Wockhardt pays Murtaza Khorakiwala solely through a salary, preferring to go down a conventional route. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Wockhardt Limited's Growth Numbers

Wockhardt Limited's earnings per share (EPS) grew 47% per year over the last three years. It saw its revenue drop 32% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Wockhardt Limited Been A Good Investment?

Since shareholders would have lost about 33% over three years, some Wockhardt Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Wockhardt rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, Wockhardt Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, the company has impressed with its EPS growth over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But we believe shareholders would want to see healthier returns before the CEO gets a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Wockhardt (1 is a bit unpleasant!) that you should be aware of before investing here.

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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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