U.S. Markets closed

Is Birla Corporation Limited's (NSE:BIRLACORPN) CEO Overpaid Relative To Its Peers?

Simply Wall St

Bachh Nahar became the CEO of Birla Corporation Limited (NSE:BIRLACORPN) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Birla

How Does Bachh Nahar's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Birla Corporation Limited has a market cap of ₹46b, and is paying total annual CEO compensation of ₹43m. (This number is for the twelve months until March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹13m. We looked at a group of companies with market capitalizations from ₹28b to ₹110b, and the median CEO total compensation was ₹26m.

Thus we can conclude that Bachh Nahar receives more in total compensation than the median of a group of companies in the same market, and of similar size to Birla Corporation Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Birla has changed over time.

NSEI:BIRLACORPN CEO Compensation, July 22nd 2019

Is Birla Corporation Limited Growing?

Over the last three years Birla Corporation Limited has grown its earnings per share (EPS) by an average of 13% per year (using a line of best fit). In the last year, its revenue is up 14%.

This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Birla Corporation Limited Been A Good Investment?

Birla Corporation Limited has generated a total shareholder return of 11% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

We compared total CEO remuneration at Birla Corporation Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. So you may want to check if insiders are buying Birla shares with their own money (free access).

If you want to buy a stock that is better than Birla, 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 editorial-team@simplywallst.com. 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.