What We Learned About Emkay Global Financial Services' (NSE:EMKAY) CEO Pay

Krishna Karwa has been the CEO of Emkay Global Financial Services Limited (NSE:EMKAY) since 2010, and this article will examine the executive's compensation with respect to the overall performance of the company. 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 Emkay Global Financial Services

How Does Total Compensation For Krishna Karwa Compare With Other Companies In The Industry?

According to our data, Emkay Global Financial Services Limited has a market capitalization of ₹1.3b, and paid its CEO total annual compensation worth ₹11m over the year to March 2020. That's a notable increase of 21% on last year. Notably, the salary which is ₹10.2m, 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 ₹1.1m. This suggests that Krishna Karwa is paid more than the median for the industry. What's more, Krishna Karwa holds ₹375m 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. Emkay Global Financial Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Emkay Global Financial Services Limited's Growth

Over the last three years, Emkay Global Financial Services Limited has shrunk its earnings per share by 78% per year. It saw its revenue drop 5.4% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-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 Emkay Global Financial Services Limited Been A Good Investment?

Given the total shareholder loss of 81% over three years, many shareholders in Emkay Global Financial Services 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 previously discussed, Krishna is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Emkay Global Financial Services you should be aware of, and 1 of them shouldn't be ignored.

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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