Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Bhuwan Tripathi has been the CEO of GAIL (India) Limited (NSE:GAIL) since 2009. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Bhuwan Tripathi’s Compensation Compare With Similar Sized Companies?
According to our data, GAIL (India) Limited has a market capitalization of ₹691b, and pays its CEO total annual compensation worth ₹9.2m. (This number is for the twelve months until March 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at ₹5.5m. We looked at a group of companies with market capitalizations over ₹549b and the median CEO total compensation was ₹60m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.
A first glance this seems like a real positive for shareholders, since Bhuwan Tripathi is paid less than the average total compensation paid by other large companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at GAIL (India) has changed over time.
Is GAIL (India) Limited Growing?
On average over the last three years, GAIL (India) Limited has grown earnings per share (EPS) by 37% each year (using a line of best fit). In the last year, its revenue is up 40%.
This demonstrates that the company has been improving recently. A good result. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.
Has GAIL (India) Limited Been A Good Investment?
Most shareholders would probably be pleased with GAIL (India) Limited for providing a total return of 52% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
GAIL (India) Limited is currently paying its CEO below what is normal for large companies. Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Bhuwan Tripathi deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. But it is even better if company insiders are also buying shares with their own money. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling GAIL (India) (free visualization of insider trades).
If you want to buy a stock that is better than GAIL (India), this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.