What Can We Conclude About North Eastern Carrying's (NSE:NECCLTD) CEO Pay?

The CEO of North Eastern Carrying Corporation Limited (NSE:NECCLTD) is Sunil Jain, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for North Eastern Carrying

How Does Total Compensation For Sunil Jain Compare With Other Companies In The Industry?

At the time of writing, our data shows that North Eastern Carrying Corporation Limited has a market capitalization of ₹397m, and reported total annual CEO compensation of ₹4.8m for 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 ₹4.8m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹2.7m. Accordingly, our analysis reveals that North Eastern Carrying Corporation Limited pays Sunil Jain north of the industry median. Furthermore, Sunil Jain directly owns ₹69m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. At the company level, North Eastern Carrying pays Sunil Jain 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.

A Look at North Eastern Carrying Corporation Limited's Growth Numbers

Over the last three years, North Eastern Carrying Corporation Limited has shrunk its earnings per share by 30% per year. It saw its revenue drop 12% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has North Eastern Carrying Corporation Limited Been A Good Investment?

Since shareholders would have lost about 78% over three years, some North Eastern Carrying Corporation Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

North Eastern Carrying pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, North Eastern Carrying pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Arguably worse, we've been waiting for positive EPS growth for the last three years. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for North Eastern Carrying (3 are a bit unpleasant!) that you should be aware of before investing here.

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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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