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In 2009 Bhuwan Tripathi was appointed CEO of GAIL (India) Limited (NSE:GAIL). This analysis aims first to contrast CEO compensation with other large companies. 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.
How Does Bhuwan Tripathi's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that GAIL (India) Limited has a market cap of ₹703b, and is paying total annual CEO compensation of ₹9.2m. (This number is for the twelve months until March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at ₹5.5m. We took a group of companies with market capitalizations over ₹557b, and calculated the median CEO total compensation to be ₹64m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
This would give shareholders a good impression of the company, since most large companies pay more, leaving less 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 GAIL (India) has changed over time.
Is GAIL (India) Limited Growing?
On average over the last three years, GAIL (India) Limited has grown earnings per share (EPS) by 37% each year (using a line of best fit). In the last year, its revenue is up 40%.
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. Shareholders might be interested in this free visualization of analyst forecasts.
Has GAIL (India) Limited Been A Good Investment?
I think that the total shareholder return of 54%, over three years, would leave most GAIL (India) 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.
It looks like GAIL (India) Limited pays its CEO less than the average at large companies. Many would consider this to indicate that the pay is modest since the business is growing. The pleasing shareholder returns are the cherry on top; you might even consider that Bhuwan Tripathi deserves a raise!
It's not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling GAIL (India) (free visualization of insider trades).
If you want to buy a stock that is better than GAIL (India), 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 firstname.lastname@example.org. 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.