A Quick Analysis On TAJGVK Hotels & Resorts' (NSE:TAJGVK) CEO Compensation

G. Reddy is the CEO of TAJGVK Hotels & Resorts Limited (NSE:TAJGVK), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for TAJGVK Hotels & Resorts

How Does Total Compensation For G. Reddy Compare With Other Companies In The Industry?

According to our data, TAJGVK Hotels & Resorts Limited has a market capitalization of ₹8.6b, and paid its CEO total annual compensation worth ₹40m over the year to March 2020. We note that's an increase of 9.5% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹40m.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹3.2m. Hence, we can conclude that G. Reddy is remunerated higher than the industry median. What's more, G. Reddy holds ₹1.0b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. On a company level, TAJGVK Hotels & Resorts prefers to reward its CEO through a salary, opting not to pay G. Reddy through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

TAJGVK Hotels & Resorts Limited's Growth

Over the last three years, TAJGVK Hotels & Resorts Limited has shrunk its earnings per share by 39% per year. It saw its revenue drop 24% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 TAJGVK Hotels & Resorts Limited Been A Good Investment?

Since shareholders would have lost about 9.5% over three years, some TAJGVK Hotels & Resorts Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

TAJGVK Hotels & Resorts rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, TAJGVK Hotels & Resorts Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for TAJGVK Hotels & Resorts (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Important note: TAJGVK Hotels & Resorts is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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. 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.
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