What Can We Learn About Manaksia's (NSE:MANAKSIA) CEO Compensation?

This article will reflect on the compensation paid to Suresh Agrawal who has served as CEO of Manaksia Limited (NSE:MANAKSIA) since 2014. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Manaksia

Comparing Manaksia Limited's CEO Compensation With the industry

Our data indicates that Manaksia Limited has a market capitalization of ₹2.5b, and total annual CEO compensation was reported as ₹8.4m for the year to March 2020. That is, the compensation was roughly the same as last year. Notably, the salary of ₹8.4m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹6.4m. Accordingly, our analysis reveals that Manaksia Limited pays Suresh Agrawal north of the industry median. What's more, Suresh Agrawal holds ₹250m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 94% of total compensation out of all the companies we analyzed, while other remuneration made up 6.1% of the pie. On a company level, Manaksia prefers to reward its CEO through a salary, opting not to pay Suresh Agrawal through non-salary benefits. 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.

Manaksia Limited's Growth

Over the last three years, Manaksia Limited has shrunk its earnings per share by 15% per year. It saw its revenue drop 24% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. 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, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Manaksia Limited Been A Good Investment?

With a three year total loss of 27% for the shareholders, Manaksia Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Manaksia pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Manaksia 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. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Manaksia (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

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.

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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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