Here's What We Learned About The CEO Pay At Signet Industries Limited (NSE:SIGIND)

Mukesh Sangla became the CEO of Signet Industries Limited (NSE:SIGIND) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Signet Industries.

See our latest analysis for Signet Industries

Comparing Signet Industries Limited's CEO Compensation With the industry

According to our data, Signet Industries Limited has a market capitalization of ₹564m, and paid its CEO total annual compensation worth ₹7.4m over the year to March 2020. That's a notable decrease of 12% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹7.4m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹1.6m. This suggests that Mukesh Sangla is paid more than the median for the industry. Moreover, Mukesh Sangla also holds ₹121m worth of Signet Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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, Signet Industries prefers to reward its CEO through a salary, opting not to pay Mukesh Sangla through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Signet Industries Limited's Growth Numbers

Signet Industries Limited has reduced its earnings per share by 27% a year over the last three years. Its revenue is down 20% over the previous year.

Few shareholders would be pleased to read that EPS have declined. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Signet Industries Limited Been A Good Investment?

Since shareholders would have lost about 74% over three years, some Signet Industries Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Signet Industries rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Signet Industries pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 5 warning signs for Signet Industries (3 are concerning!) that you should be aware of before investing here.

Important note: Signet Industries 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.

If you’re looking to trade Signet Industries, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.