This Is Why Gujarat Industries Power Company Limited's (NSE:GIPCL) CEO Compensation Looks Appropriate

Key Insights

• Gujarat Industries Power's Annual General Meeting to take place on 16th of September
• Total pay for CEO Vatsala Vasudeva includes ₹3.75m salary
• Total compensation is similar to the industry average
• Gujarat Industries Power's EPS declined by 6.4% over the past three years while total shareholder return over the past three years was 102%

Under the guidance of CEO Vatsala Vasudeva, Gujarat Industries Power Company Limited (NSE:GIPCL) has performed reasonably well recently. As shareholders go into the upcoming AGM on 16th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for Gujarat Industries Power

Comparing Gujarat Industries Power Company Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Gujarat Industries Power Company Limited has a market capitalization of ₹20b, and reported total annual CEO compensation of ₹4.3m for the year to March 2023. That's a notable increase of 13% on last year. We note that the salary portion, which stands at ₹3.75m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the Indian Renewable Energy industry with market caps ranging from ₹8.3b to ₹33b, we found that the median CEO total compensation was ₹4.5m. This suggests that Gujarat Industries Power remunerates its CEO largely in line with the industry average.

Component	2023	2022	Proportion (2023)
Salary	₹3.7m	₹3.3m	86%
Other	₹600k	₹539k	14%
Total Compensation	₹4.3m	₹3.9m	100%

Speaking on an industry level, nearly 71% of total compensation represents salary, while the remainder of 30% is other remuneration. It's interesting to note that Gujarat Industries Power pays out a greater portion of remuneration through salary, compared to the 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 Gujarat Industries Power Company Limited's Growth Numbers

Over the last three years, Gujarat Industries Power Company Limited has shrunk its earnings per share by 6.4% per year. It achieved revenue growth of 18% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Gujarat Industries Power Company Limited Been A Good Investment?

We think that the total shareholder return of 102%, over three years, would leave most Gujarat Industries Power Company Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Although the company has performed relatively well, we still think there are some areas that could be improved. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Gujarat Industries Power that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.