Gautam Chatterjee became the CEO of Exide Industries Limited (NSE:EXIDEIND) in 2016, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also assess whether Exide Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Exide Industries Limited’s CEO Compensation With the industry
Our data indicates that Exide Industries Limited has a market capitalization of ₹173b, and total annual CEO compensation was reported as ₹46m for the year to March 2020. This means that the compensation hasn’t changed much from last year. Notably, the salary which is ₹27.6m, represents most of the total compensation being paid.
On comparing similar companies from the same industry with market caps ranging from ₹73b to ₹233b, we found that the median CEO total compensation was ₹53m. This suggests that Exide Industries remunerates its CEO largely in line with the industry average. What’s more, Gautam Chatterjee holds ₹2.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. In Exide Industries’ case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Exide Industries Limited’s Growth
Exide Industries Limited’s earnings per share (EPS) grew 2.1% per year over the last three years. In the last year, its revenue is down 6.8%.
We generally like to see a little revenue growth, but the modest EPSgrowth gives us some relief. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Exide Industries Limited Been A Good Investment?
Exide Industries Limited has generated a total shareholder return of 5.6% over three years, so most shareholders wouldn’t be too disappointed. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
As we noted earlier, Exide Industries pays its CEO in line with similar-sized companies belonging to the same industry. However, EPS and total shareholder return are solid yet uninspiring. We’d say that Gautam is remunerated reasonably, but shareholders might be looking for better returns before they agree Gautam deserves a raise.
CEO compensation can have a massive impact on performance, but it’s just one element. That’s why we did some digging and identified 1 warning sign for Exide Industries that you should be aware of before investing.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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