How Much Is Shriram EPC Limited (NSE:SHRIRAMEPC) CEO Getting Paid?

Thyagarajan Shivaraman has been the CEO of Shriram EPC Limited (NSE:SHRIRAMEPC) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. 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 Shriram EPC

Comparing Shriram EPC Limited's CEO Compensation With the industry

According to our data, Shriram EPC Limited has a market capitalization of ₹4.0b, and paid its CEO total annual compensation worth ₹6.2m over 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 ₹6.2m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹5.7m. This suggests that Shriram EPC remunerates its CEO largely in line with the industry average. What's more, Thyagarajan Shivaraman holds ₹1.2m 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, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. Speaking on a company level, Shriram EPC prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Shriram EPC Limited's Growth

Over the past three years, Shriram EPC Limited has seen its earnings per share (EPS) grow by 12% per year. It saw its revenue drop 34% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Shriram EPC Limited Been A Good Investment?

With a three year total loss of 79% for the shareholders, Shriram EPC Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shriram EPC rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, Shriram EPC Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

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 1 warning sign for Shriram EPC that investors should think about before committing capital to this stock.

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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