We Think Godfrey Phillips India Limited's (NSE:GODFRYPHLP) CEO Compensation Looks Fair

Key Insights

• Godfrey Phillips India will host its Annual General Meeting on 6th of September
• Total pay for CEO Sharad Aggarwal includes ₹112.3m salary
• The overall pay is comparable to the industry average
• Godfrey Phillips India's total shareholder return over the past three years was 602% while its EPS grew by 25% over the past three years

The performance at Godfrey Phillips India Limited (NSE:GODFRYPHLP) has been quite strong recently and CEO Sharad Aggarwal has played a role in it. Coming up to the next AGM on 6th of September, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Godfrey Phillips India

How Does Total Compensation For Sharad Aggarwal Compare With Other Companies In The Industry?

At the time of writing, our data shows that Godfrey Phillips India Limited has a market capitalization of ₹338b, and reported total annual CEO compensation of ₹123m for the year to March 2024. Notably, that's an increase of 65% over the year before. We note that the salary portion, which stands at ₹112.3m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the India Tobacco industry with market capitalizations between ₹168b and ₹536b, we discovered that the median CEO total compensation of that group was ₹122m. From this we gather that Sharad Aggarwal is paid around the median for CEOs in the industry.

Component	2024	2023	Proportion (2024)
Salary	₹112m	₹65m	92%
Other	₹10m	₹9.5m	8%
Total Compensation	₹123m	₹74m	100%

Talking in terms of the industry, salary represented approximately 23% of total compensation out of all the companies we analyzed, while other remuneration made up 77% of the pie. It's interesting to note that Godfrey Phillips India pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Godfrey Phillips India Limited's Growth

Godfrey Phillips India Limited has seen its earnings per share (EPS) increase by 25% a year over the past three years. Its revenue is up 20% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Godfrey Phillips India Limited Been A Good Investment?

We think that the total shareholder return of 602%, over three years, would leave most Godfrey Phillips India Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Godfrey Phillips India that investors should look into moving forward.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.