Here's What We Think About Universal Cables' (NSE:UNIVCABLES) CEO Pay

Y. Lodha became the CEO of Universal Cables Limited (NSE:UNIVCABLES) in 2015, 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 Universal Cables.

View our latest analysis for Universal Cables

How Does Total Compensation For Y. Lodha Compare With Other Companies In The Industry?

According to our data, Universal Cables Limited has a market capitalization of ₹4.4b, and paid its CEO total annual compensation worth ₹12m over the year to March 2020. That's a notable increase of 30% on last year. In particular, the salary of ₹7.60m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹5.4m. Accordingly, our analysis reveals that Universal Cables Limited pays Y. Lodha north of the industry median.

Talking in terms of the industry, salary represented approximately 95% of total compensation out of all the companies we analyzed, while other remuneration made up 5.3% of the pie. It's interesting to note that Universal Cables allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Universal Cables Limited's Growth Numbers

Over the past three years, Universal Cables Limited has seen its earnings per share (EPS) grow by 8.5% per year. It achieved revenue growth of 11% over the last year.

We think the revenue growth is good. And the modest growth in earnings per share isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. 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 Universal Cables Limited Been A Good Investment?

With a total shareholder return of 30% over three years, Universal Cables Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, Universal Cables 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. But the company lacks earnings per share growth, and returns to shareholders are less than stellar, over the last three years. So while shareholders might not be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before thinking a bump in pay is in order.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Universal Cables (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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