How Much Does Lokesh Machines' (NSE:LOKESHMACH) CEO Make?

Mullapudi Rao is the CEO of Lokesh Machines Limited (NSE:LOKESHMACH), 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 Lokesh Machines pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Lokesh Machines

Comparing Lokesh Machines Limited's CEO Compensation With the industry

At the time of writing, our data shows that Lokesh Machines Limited has a market capitalization of ₹362m, and reported total annual CEO compensation of ₹6.0m for the year to March 2020. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹6.0m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹6.3m. So it looks like Lokesh Machines compensates Mullapudi Rao in line with the median for the industry. What's more, Mullapudi Rao holds ₹10m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 86% of total compensation represents salary and 14% is other remuneration. On a company level, Lokesh Machines prefers to reward its CEO through a salary, opting not to pay Mullapudi Rao through non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Lokesh Machines Limited's Growth Numbers

Over the last three years, Lokesh Machines Limited has shrunk its earnings per share by 39% per year. In the last year, its revenue is down 38%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Lokesh Machines Limited Been A Good Investment?

Given the total shareholder loss of 73% over three years, many shareholders in Lokesh Machines Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Lokesh Machines pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Mullapudi is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

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 Lokesh Machines (2 are potentially serious!) that you should be aware of before investing here.

Switching gears from Lokesh Machines, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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