Here's What We Learned About The CEO Pay At TCI Developers Limited (NSE:TCIDEVELOP)

The CEO of TCI Developers Limited (NSE:TCIDEVELOP) is Naresh Baranwal, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for TCI Developers

How Does Total Compensation For Naresh Baranwal Compare With Other Companies In The Industry?

Our data indicates that TCI Developers Limited has a market capitalization of ₹951m, and total annual CEO compensation was reported as ₹3.8m for the year to March 2020. That's a fairly small increase of 6.1% over the previous year. Notably, the salary of ₹3.8m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹2.4m. Accordingly, our analysis reveals that TCI Developers Limited pays Naresh Baranwal north of the industry median.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. At the company level, TCI Developers pays Naresh Baranwal solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at TCI Developers Limited's Growth Numbers

Over the last three years, TCI Developers Limited has shrunk its earnings per share by 19% per year. It achieved revenue growth of 10% over the last year.

Overall this is not a very positive result for shareholders. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around earnings. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has TCI Developers Limited Been A Good Investment?

Given the total shareholder loss of 26% over three years, many shareholders in TCI Developers Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

TCI Developers rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, TCI Developers 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. Add to that declining earnings 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 4 warning signs for TCI Developers that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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