U.S. Markets closed

Is Jyothy Labs Limited's (NSE:JYOTHYLAB) CEO Pay Fair?

Simply Wall St

In 1983 Moothedath Ramachandran was appointed CEO of Jyothy Labs Limited (NSE:JYOTHYLAB). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Jyothy Labs

How Does Moothedath Ramachandran's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Jyothy Labs Limited has a market cap of ₹60b, and reported total annual CEO compensation of ₹48m for the year to March 2019. That's a notable increase of 20% on last year. We think total compensation is more important but we note that the CEO salary is lower, at ₹1.0. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ₹28b to ₹114b. The median total CEO compensation was ₹28m.

It would therefore appear that Jyothy Labs Limited pays Moothedath Ramachandran more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Jyothy Labs, below.

NSEI:JYOTHYLAB CEO Compensation, September 22nd 2019

Is Jyothy Labs Limited Growing?

Jyothy Labs Limited has increased its earnings per share (EPS) by an average of 3.1% a year, over the last three years (using a line of best fit). It achieved revenue growth of 5.9% over the last year.

I would argue that the improvement in revenue isn't particularly impressive, but I'm happy with the modest EPS growth. Considering these factors I'd say performance has been pretty decent, though not amazing. It could be important to check this free visual depiction of what analysts expect for the future.

Has Jyothy Labs Limited Been A Good Investment?

Given the total loss of 1.8% over three years, many shareholders in Jyothy Labs Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by Jyothy Labs Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. This contrasts with the growth in CEO remuneration, in the last year. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Shareholders may want to check for free if Jyothy Labs insiders are buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.