Is Asahi India Glass Limited's (NSE:ASAHIINDIA) CEO Salary Justified?
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Sanjay Labroo became the CEO of Asahi India Glass Limited (NSE:ASAHIINDIA) in 1990. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Asahi India Glass
How Does Sanjay Labroo's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Asahi India Glass Limited has a market cap of ₹52b, and is paying total annual CEO compensation of ₹38m. (This number is for the twelve months until March 2018). While we always look at total compensation first, we note that the salary component is less, at ₹21m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ₹28b to ₹110b. The median total CEO compensation was ₹24m.
Thus we can conclude that Sanjay Labroo receives more in total compensation than the median of a group of companies in the same market, and of similar size to Asahi India Glass Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Asahi India Glass, below.
Is Asahi India Glass Limited Growing?
Over the last three years Asahi India Glass Limited has grown its earnings per share (EPS) by an average of 27% per year (using a line of best fit). Its revenue is up 11% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This 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 Asahi India Glass Limited Been A Good Investment?
Asahi India Glass Limited has served shareholders reasonably well, with a total return of 26% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
We examined the amount Asahi India Glass Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Whatever your view on compensation, you might want to check if insiders are buying or selling Asahi India Glass shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.
