In This Article:
Potluri Babu has been the CEO of SMS Pharmaceuticals Limited (NSE:SMSPHARMA) since 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. 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.
See our latest analysis for SMS Pharmaceuticals
How Does Potluri Babu’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that SMS Pharmaceuticals Limited has a market cap of ₹6.1b, and is paying total annual CEO compensation of ₹32m. We note that’s an increase of 38% above last year. We took a group of companies with market capitalizations below ₹15b, and calculated the median CEO compensation to be ₹1.5m.
As you can see, Potluri Babu is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean SMS Pharmaceuticals Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at SMS Pharmaceuticals has changed over time.
Is SMS Pharmaceuticals Limited Growing?
SMS Pharmaceuticals Limited has reduced its earnings per share by an average of 6.7% a year, over the last three years. Its revenue is up 5.7% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has SMS Pharmaceuticals Limited Been A Good Investment?
Since shareholders would have lost about 12% over three years, some SMS Pharmaceuticals Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
We compared total CEO remuneration at SMS Pharmaceuticals Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.