Here's Why We Think GAIL (India) Limited's (NSE:GAIL) CEO Compensation Looks Fair

Key Insights

• GAIL (India)'s Annual General Meeting to take place on 29th of August
• CEO Sandeep Gupta's total compensation includes salary of ₹7.25m
• The overall pay is 79% below the industry average
• GAIL (India)'s EPS declined by 4.1% over the past three years while total shareholder return over the past three years was 120%

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The performance at GAIL (India) Limited (NSE:GAIL) has been rather lacklustre of late and shareholders may be wondering what CEO Sandeep Gupta is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 29th of August. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

View our latest analysis for GAIL (India)

Comparing GAIL (India) Limited's CEO Compensation With The Industry

According to our data, GAIL (India) Limited has a market capitalization of ₹1.2t, and paid its CEO total annual compensation worth ₹11m over the year to March 2025. That's a notable increase of 22% on last year. We note that the salary portion, which stands at ₹7.25m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Indian Gas Utilities industry with market capitalizations above ₹700b, reported a median total CEO compensation of ₹54m. That is to say, Sandeep Gupta is paid under the industry median.

On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. According to our research, GAIL (India) has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at GAIL (India) Limited's Growth Numbers

Over the last three years, GAIL (India) Limited has shrunk its earnings per share by 4.1% per year. It achieved revenue growth of 5.4% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 GAIL (India) Limited Been A Good Investment?

Most shareholders would probably be pleased with GAIL (India) Limited for providing a total return of 120% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us wonder if these strong returns can continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in GAIL (India) we think you should know about.

Important note: GAIL (India) 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.