Here's What We Learned About The CEO Pay At Paisalo Digital Limited (NSE:PAISALO)

Sunil Agarwal has been the CEO of Paisalo Digital Limited (NSE:PAISALO) since 2008, and this article will examine the executive's compensation 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.

View our latest analysis for Paisalo Digital

Comparing Paisalo Digital Limited's CEO Compensation With the industry

Our data indicates that Paisalo Digital Limited has a market capitalization of ₹18b, and total annual CEO compensation was reported as ₹30m for the year to March 2020. We note that's a decrease of 45% compared to last year. Notably, the salary of ₹30m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations ranging from ₹7.4b to ₹29b, the reported median CEO total compensation was ₹12m. This suggests that Sunil Agarwal is paid more than the median for the industry. Furthermore, Sunil Agarwal directly owns ₹1.4b worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Speaking on a company level, Paisalo Digital prefers to tread along a traditional path, disbursing all compensation through a salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Paisalo Digital Limited's Growth Numbers

Paisalo Digital Limited saw earnings per share stay pretty flat over the last three years. It saw its revenue drop 2.5% over the last year.

A lack of EPS improvement is not good to see. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Paisalo Digital Limited Been A Good Investment?

Most shareholders would probably be pleased with Paisalo Digital Limited for providing a total return of 126% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Paisalo Digital pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, Paisalo Digital 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. We're not seeing great strides in EPS, but the company has clearly pleased some investors, given the returns over the last three years. So while we would not say that Sunil is generously paid, stockholders would want to see some EPS growth before agreeing that a raise is a good idea.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Paisalo Digital you should be aware of, and 1 of them is a bit concerning.

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