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How Should Investors Feel About Hindustan Oil Exploration Company Limited's (NSE:HINDOILEXP) CEO Pay?

Simply Wall St

In 2015 Pandarinathan Elango was appointed CEO of Hindustan Oil Exploration Company Limited (NSE:HINDOILEXP). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.

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Check out our latest analysis for Hindustan Oil Exploration

How Does Pandarinathan Elango's Compensation Compare With Similar Sized Companies?

According to our data, Hindustan Oil Exploration Company Limited has a market capitalization of ₹16b, and pays its CEO total annual compensation worth ₹10m. (This figure is for the year to March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at ₹4.1m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ₹7.0b to ₹28b. The median total CEO compensation was ₹17m.

Most shareholders would consider it a positive that Pandarinathan Elango takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see, below, how CEO compensation at Hindustan Oil Exploration has changed over time.

NSEI:HINDOILEXP CEO Compensation, May 20th 2019

Is Hindustan Oil Exploration Company Limited Growing?

On average over the last three years, Hindustan Oil Exploration Company Limited has grown earnings per share (EPS) by 78% each year (using a line of best fit). It achieved revenue growth of 467% over the last year.

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. You might want to check this free visual report on analyst forecasts for future earnings.

Has Hindustan Oil Exploration Company Limited Been A Good Investment?

Boasting a total shareholder return of 266% over three years, Hindustan Oil Exploration Company Limited has done well by shareholders. 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.

In Summary...

It appears that Hindustan Oil Exploration Company Limited remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Pandarinathan Elango deserves a raise!

Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Hindustan Oil Exploration.

Important note: Hindustan Oil Exploration 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.