Here's What We Think About Birla Cable Limited's (NSE:BIRLACABLE) CEO Pay
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In 2012 R. Sridharan was appointed CEO of Birla Cable Limited (NSE:BIRLACABLE). First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Birla Cable
How Does R. Sridharan's Compensation Compare With Similar Sized Companies?
According to our data, Birla Cable Limited has a market capitalization of ₹3.0b, and pays its CEO total annual compensation worth ₹8.3m. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹6.4m. We examined a group of similar sized companies, with market capitalizations of below ₹14b. The median CEO total compensation in that group is ₹1.3m.
Thus we can conclude that R. Sridharan receives more in total compensation than the median of a group of companies in the same market, and of similar size to Birla Cable 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 a visual representation of the CEO compensation at Birla Cable, below.
Is Birla Cable Limited Growing?
Birla Cable Limited has increased its earnings per share (EPS) by an average of 82% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 55%.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Birla Cable Limited Been A Good Investment?
I think that the total shareholder return of 184%, over three years, would leave most Birla Cable Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
We compared total CEO remuneration at Birla Cable Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Birla Cable shares with their own money (free access).
Important note: Birla Cable may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
