Is Grasim Industries Limited's (NSE:GRASIM) CEO Pay Fair?
Dilip Gaur became the CEO of Grasim Industries Limited (NSE:GRASIM) in 2016. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Grasim Industries
How Does Dilip Gaur's Compensation Compare With Similar Sized Companies?
Our data indicates that Grasim Industries Limited is worth ₹568b, and total annual CEO compensation is ₹58m. (This number is for the twelve months until March 2018). While we always look at total compensation first, we note that the salary component is less, at ₹40m. We looked at a group of companies with market capitalizations from ₹279b to ₹836b, and the median CEO total compensation was ₹64m.
So Dilip Gaur is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Grasim Industries, below.
Is Grasim Industries Limited Growing?
On average over the last three years, Grasim Industries Limited has shrunk earnings per share by 22% each year (measured with a line of best fit). It achieved revenue growth of 43% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has Grasim Industries Limited Been A Good Investment?
Grasim Industries Limited has generated a total shareholder return of 8.0% over three years, so most shareholders wouldn't be too disappointed. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
Remuneration for Dilip Gaur is close enough to the median pay for a CEO of a similar sized company .
The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. But we don't think the CEO compensation is a problem. So you may want to check if insiders are buying Grasim Industries shares with their own money (free access).
If you want to buy a stock that is better than Grasim Industries, 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.
