Here's What We Think About Capital Trust's (NSE:CAPTRUST) CEO Pay

August 16, 2020

This article will reflect on the compensation paid to Yogen Khosla who has served as CEO of Capital Trust Limited (NSE:CAPTRUST) since 2003. 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 Capital Trust

Comparing Capital Trust Limited's CEO Compensation With the industry

At the time of writing, our data shows that Capital Trust Limited has a market capitalization of ₹1.1b, and reported total annual CEO compensation of ₹15m for the year to March 2020. We note that's a decrease of 12% compared to last year. We note that the salary portion, which stands at ₹12.1m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹958k. Accordingly, our analysis reveals that Capital Trust Limited pays Yogen Khosla north of the industry median. Furthermore, Yogen Khosla directly owns ₹421m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	₹12m	₹18m	79%
Other	₹3.3m	-	21%
Total Compensation	₹15m	₹18m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Capital Trust sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation — NSEI:CAPTRUST CEO Compensation August 17th 2020

A Look at Capital Trust Limited's Growth Numbers

Over the last three years, Capital Trust Limited has shrunk its earnings per share by 53% per year. Its revenue is down 17% over the previous year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. 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 Capital Trust Limited Been A Good Investment?

Since shareholders would have lost about 84% over three years, some Capital Trust Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Yogen is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 5 warning signs for Capital Trust (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the 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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