In 2013 Ashok Goel was appointed CEO of Essel Propack Limited (NSE:ESSELPRO). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Essel Propack

How Does Ashok Goel’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Essel Propack Limited has a market cap of ₹28b, and is paying total annual CEO compensation of ₹64m. (This number is for the twelve months until 2018). While we always look at total compensation first, we note that the salary component is less, at ₹30m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ₹14b to ₹56b. The median total CEO compensation was ₹22m.

Thus we can conclude that Ashok Goel receives more in total compensation than the median of a group of companies in the same market, and of similar size to Essel Propack Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Essel Propack has changed from year to year.

Is Essel Propack Limited Growing?

Over the last three years Essel Propack Limited has shrunk its earnings per share by an average of 1.3% per year. In the last year, its revenue is up 5.9%.

The lack of earnings per share growth in the last three years is unimpressive. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Essel Propack Limited Been A Good Investment?

Essel Propack Limited has served shareholders reasonably well, with a total return of 19% 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 compared the total CEO remuneration paid by Essel Propack Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

And shareholder returns are decent but not great. So you may want to delve deeper, because we don’t think the CEO pay is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Essel Propack shares (free trial).

Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.

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 editorial-team@simplywallst.com.