How Much Did Nitin Spinners' (NSE:NITINSPIN) CEO Pocket Last Year?

Dinesh Nolkha is the CEO of Nitin Spinners Limited (NSE:NITINSPIN), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Nitin Spinners pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Nitin Spinners

How Does Total Compensation For Dinesh Nolkha Compare With Other Companies In The Industry?

At the time of writing, our data shows that Nitin Spinners Limited has a market capitalization of ₹2.2b, and reported total annual CEO compensation of ₹7.8m for the year to March 2020. That's a notable decrease of 37% on last year. In particular, the salary of ₹4.32m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹4.2m. This suggests that Dinesh Nolkha is paid more than the median for the industry. Moreover, Dinesh Nolkha also holds ₹59m worth of Nitin Spinners stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. It's interesting to note that Nitin Spinners 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.

Nitin Spinners Limited's Growth

Over the last three years, Nitin Spinners Limited has shrunk its earnings per share by 62% per year. In the last year, its revenue is up 12%.

Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. 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 Nitin Spinners Limited Been A Good Investment?

Given the total shareholder loss of 62% over three years, many shareholders in Nitin Spinners 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...

As we touched on above, Nitin Spinners 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. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for Nitin Spinners (2 are concerning!) 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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