What Did Shankara Building Products' (NSE:SHANKARA) CEO Take Home Last Year?

Siddhartha Mundra became the CEO of Shankara Building Products Limited (NSE:SHANKARA) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Shankara Building Products pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Shankara Building Products

How Does Total Compensation For Siddhartha Mundra Compare With Other Companies In The Industry?

At the time of writing, our data shows that Shankara Building Products Limited has a market capitalization of ₹9.1b, and reported total annual CEO compensation of ₹9.8m for the year to March 2020. That is, the compensation was roughly the same as last year. Notably, the salary which is ₹8.95m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹6.0m. Hence, we can conclude that Siddhartha Mundra is remunerated higher than the industry median. Moreover, Siddhartha Mundra also holds ₹598k worth of Shankara Building Products stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. There isn't a significant difference between Shankara Building Products and the broader market, in terms of salary allocation in the overall compensation package. 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.

A Look at Shankara Building Products Limited's Growth Numbers

Shankara Building Products Limited has reduced its earnings per share by 50% a year over the last three years. In the last year, its revenue is down 6.4%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Shankara Building Products Limited Been A Good Investment?

Given the total shareholder loss of 65% over three years, many shareholders in Shankara Building Products Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, Shankara Building Products pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 2 which are potentially serious) in Shankara Building Products we think you should know about.

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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