How Should Investors React To Coral India Finance and Housing's (NSE:CORALFINAC) CEO Pay?

Navin Doshi has been the CEO of Coral India Finance and Housing Limited (NSE:CORALFINAC) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Coral India Finance and Housing pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Coral India Finance and Housing

How Does Total Compensation For Navin Doshi Compare With Other Companies In The Industry?

Our data indicates that Coral India Finance and Housing Limited has a market capitalization of ₹794m, and total annual CEO compensation was reported as ₹5.4m for the year to March 2020. We note that's a decrease of 36% compared to last year. Notably, the salary of ₹5.4m is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹5.1m. From this we gather that Navin Doshi is paid around the median for CEOs in the industry. Moreover, Navin Doshi also holds ₹408m worth of Coral India Finance and Housing stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. At the company level, Coral India Finance and Housing pays Navin Doshi solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Coral India Finance and Housing Limited's Growth

Over the last three years, Coral India Finance and Housing Limited has shrunk its earnings per share by 4.6% per year. Its revenue is down 22% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Coral India Finance and Housing Limited Been A Good Investment?

With a three year total loss of 74% for the shareholders, Coral India Finance and Housing Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Coral India Finance and Housing pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Navin is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for Coral India Finance and Housing that investors should look into moving forward.

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.

When trading Coral India Finance and Housing 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.