How Should Investors React To Pil Italica Lifestyle Limited’s (NSE:PILITA) CEO Pay?

Daud Dawood is the CEO of Pil Italica Lifestyle Limited (NSE:PILITA). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Pil Italica Lifestyle

How Does Daud Dawood’s Compensation Compare With Similar Sized Companies?

According to our data, Pil Italica Lifestyle Limited has a market capitalization of ₹1.5b, and paid its CEO total annual compensation worth ₹4.7m over the year to March 2019. It is worth noting that the CEO compensation consists almost entirely of the salary, worth ₹4.7m. We examined a group of similar sized companies, with market capitalizations of below ₹14b. The median CEO total compensation in that group is ₹3.5m.

Thus we can conclude that Daud Dawood receives more in total compensation than the median of a group of companies in the same market, and of similar size to Pil Italica Lifestyle Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Pil Italica Lifestyle has changed over time.

NSEI:PILITA CEO Compensation, January 29th 2020
NSEI:PILITA CEO Compensation, January 29th 2020

Is Pil Italica Lifestyle Limited Growing?

Pil Italica Lifestyle Limited has reduced its earnings per share by an average of 7.6% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 23%.

Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. 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 shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Pil Italica Lifestyle Limited Been A Good Investment?

Given the total loss of 48% over three years, many shareholders in Pil Italica Lifestyle 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…

We compared total CEO remuneration at Pil Italica Lifestyle Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying Pil Italica Lifestyle shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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