How Is Sanghvi Movers' (NSE:SANGHVIMOV) CEO Paid Relative To Peers?

Sham Kajale became the CEO of Sanghvi Movers Limited (NSE:SANGHVIMOV) in 2017, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Sanghvi Movers

How Does Total Compensation For Sham Kajale Compare With Other Companies In The Industry?

According to our data, Sanghvi Movers Limited has a market capitalization of ₹3.4b, and paid its CEO total annual compensation worth ₹13m over the year to March 2020. Notably, that's an increase of 9.7% over the year before. Notably, the salary which is ₹9.16m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹1.6m. Accordingly, our analysis reveals that Sanghvi Movers Limited pays Sham Kajale 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. Sanghvi Movers pays a modest slice of remuneration through salary, as compared to the broader industry. 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 Sanghvi Movers Limited's Growth Numbers

Over the last three years, Sanghvi Movers Limited has shrunk its earnings per share by 45% per year. Its revenue is down 6.2% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Sanghvi Movers Limited Been A Good Investment?

Given the total shareholder loss of 50% over three years, many shareholders in Sanghvi Movers Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Sanghvi Movers 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. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

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 3 warning signs for Sanghvi Movers (2 shouldn't be ignored!) that you should be aware of before investing here.

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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