Should You Worry About Ginni Filaments Limited's (NSE:GINNIFILA) CEO Pay?

Shishir Jaipuria is the CEO of Ginni Filaments Limited (NSE:GINNIFILA). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Ginni Filaments

How Does Shishir Jaipuria's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Ginni Filaments Limited has a market cap of ₹586m, and reported total annual CEO compensation of ₹15m for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at ₹13m. We looked at a group of companies with market capitalizations under ₹15b, and the median CEO total compensation was ₹3.8m.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Ginni Filaments. It's interesting to note that a majority of companies in the industry prefer paying their CEOs purely through salaries, with non-salary benefits omitted from the equation. Our data reveals that Ginni Filaments allocates salary in line with the wider market.

As you can see, Shishir Jaipuria is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ginni Filaments Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. The graphic below shows how CEO compensation at Ginni Filaments has changed from year to year.

Is Ginni Filaments Limited Growing?

Ginni Filaments Limited has reduced its earnings per share by an average of 104% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 4.1% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Ginni Filaments Limited Been A Good Investment?

Since shareholders would have lost about 87% over three years, some Ginni Filaments Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount Ginni Filaments Limited pays its CEO, and compared it to the amount paid by similar sized companies. 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! Taking a breather from CEO compensation, we've spotted 4 warning signs for Ginni Filaments (of which 3 are significant!) you should know about in order to have a holistic understanding of the stock.

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

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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. Thank you for reading.