Key Things To Understand About JM Financial's (NSE:JMFINANCIL) CEO Pay Cheque

This article will reflect on the compensation paid to Vishal Kampani who has served as CEO of JM Financial Limited (NSE:JMFINANCIL) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for JM Financial.

Check out our latest analysis for JM Financial

Comparing JM Financial Limited's CEO Compensation With the industry

Our data indicates that JM Financial Limited has a market capitalization of ₹79b, and total annual CEO compensation was reported as ₹20m for the year to March 2020. That's a notable increase of 17% on last year. We note that the salary portion, which stands at ₹15.6m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₹30b and ₹120b had a median total CEO compensation of ₹24m. This suggests that JM Financial remunerates its CEO largely in line with the industry average. What's more, Vishal Kampani holds ₹1.3b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. JM Financial pays a modest slice of remuneration through salary, as compared to the broader industry. 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.

JM Financial Limited's Growth

Over the last three years, JM Financial Limited has shrunk its earnings per share by 2.7% per year. Its revenue is down 6.8% over the previous year.

Its a bit disappointing to see that the company has failed to grow its EPS. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has JM Financial Limited Been A Good Investment?

Since shareholders would have lost about 30% over three years, some JM Financial Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, JM Financial pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 4 warning signs for JM Financial that investors should think about before committing capital to this stock.

Important note: JM Financial is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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