In This Article:
Ambati Venu became the CEO of Abbott India Limited (NSE:ABBOTINDIA) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Abbott India
How Does Ambati Venu’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Abbott India Limited has a market cap of ₹156b, and is paying total annual CEO compensation of ₹59m. (This figure is for the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at ₹29m. We looked at a group of companies with market capitalizations from ₹71b to ₹227b, and the median CEO compensation was ₹38m.
As you can see, Ambati Venu is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Abbott India 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.
The graphic below shows how CEO compensation at Abbott India has changed from year to year.
Is Abbott India Limited Growing?
On average over the last three years, Abbott India Limited has grown earnings per share (EPS) by 21% each year (using a line of best fit). It achieved revenue growth of 10% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Abbott India Limited Been A Good Investment?
I think that the total shareholder return of 48%, over three years, would leave most Abbott India Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
We compared total CEO remuneration at Abbott India Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Abbott India (free visualization of insider trades).