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Nitin Patil became the CEO of Gujarat Gas Limited (NSE:GUJGAS) in 2016. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Nitin Patil's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Gujarat Gas Limited has a market cap of ₹115b, and is paying total annual CEO compensation of ₹9.8m. (This number is for the twelve months until March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹8.4m. We looked at a group of companies with market capitalizations from ₹68b to ₹219b, and the median CEO total compensation was ₹39m.
A first glance this seems like a real positive for shareholders, since Nitin Patil is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Gujarat Gas has changed over time.
Is Gujarat Gas Limited Growing?
Gujarat Gas Limited has increased its earnings per share (EPS) by an average of 27% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 26%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 Gujarat Gas Limited Been A Good Investment?
Most shareholders would probably be pleased with Gujarat Gas Limited for providing a total return of 49% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Gujarat Gas Limited is currently paying its CEO below what is normal for companies of its size. Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that Nitin Patil 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. Whatever your view on compensation, you might want to check if insiders are buying or selling Gujarat Gas shares (free trial).
If you want to buy a stock that is better than Gujarat Gas, 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 email@example.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.