B. Tripathi became the CEO of GAIL (India) Limited (NSE:GAIL) in 2009. This analysis aims first to contrast CEO compensation with other large companies. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does B. 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 ₹777b, and is paying total annual CEO compensation of ₹9.2m. (This figure is for the year to 2018). While we always look at total compensation first, we note that the salary component is less, at ₹5.5m. We took a group of companies with market capitalizations over ₹564b, and calculated the median CEO compensation to be ₹94m.
A first glance this seems like a real positive for shareholders, since B. Tripathi is paid less than the average compensation paid by other large companies. While this is a good thing, you’ll need to understand the business better before you can form an opinion.
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 19% each year. Its revenue is up 12% over last year.
This demonstrates that the company has been improving recently. A good result. IThis sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has GAIL (India) Limited Been A Good Investment?
Boasting a total shareholder return of 78% over three years, GAIL (India) Limited has done well by shareholders. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
GAIL (India) Limited is currently paying its CEO below what is normal for large 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 B. Tripathi deserves a raise!
It’s not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling GAIL (India) shares (free trial).
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.