How Does Precision Wires India's (NSE:PRECWIRE) CEO Salary Compare to Peers?

The CEO of Precision Wires India Ltd. (NSE:PRECWIRE) is Mahendra Mehta, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Precision Wires India pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Precision Wires India

How Does Total Compensation For Mahendra Mehta Compare With Other Companies In The Industry?

Our data indicates that Precision Wires India Ltd. has a market capitalization of ₹2.8b, and total annual CEO compensation was reported as ₹8.2m for the year to March 2020. That's a notable decrease of 29% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹3.1m.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹5.8m. Hence, we can conclude that Mahendra Mehta is remunerated higher than the industry median. Furthermore, Mahendra Mehta directly owns ₹105m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 95% of total compensation represents salary and 5.1% is other remuneration. Precision Wires India sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Precision Wires India Ltd.'s Growth

Over the last three years, Precision Wires India Ltd. has shrunk its earnings per share by 4.6% per year. It saw its revenue drop 28% over the last year.

Overall this is not a very positive result for shareholders. 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. 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 Precision Wires India Ltd. Been A Good Investment?

Given the total shareholder loss of 36% over three years, many shareholders in Precision Wires India Ltd. are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Precision Wires India Ltd. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Precision Wires India that investors should think about before committing capital to this stock.

Important note: Precision Wires India 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.

When trading Precision Wires India or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on 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.