What We Learned About MEP Infrastructure Developers' (NSE:MEP) CEO Pay

Jayant Mhaiskar has been the CEO of MEP Infrastructure Developers Limited (NSE:MEP) since 2014, 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 MEP Infrastructure Developers

How Does Total Compensation For Jayant Mhaiskar Compare With Other Companies In The Industry?

Our data indicates that MEP Infrastructure Developers Limited has a market capitalization of ₹2.6b, and total annual CEO compensation was reported as ₹6.0m for the year to March 2020. We note that's a decrease of 67% compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹6.0m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹5.4m. From this we gather that Jayant Mhaiskar is paid around the median for CEOs in the industry. Furthermore, Jayant Mhaiskar directly owns ₹201m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 93% of total compensation represents salary and 7.5% is other remuneration. Speaking on a company level, MEP Infrastructure Developers prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

MEP Infrastructure Developers Limited's Growth

Over the last three years, MEP Infrastructure Developers Limited has shrunk its earnings per share by 75% per year. It saw its revenue drop 36% 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. 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 MEP Infrastructure Developers Limited Been A Good Investment?

Since shareholders would have lost about 87% over three years, some MEP Infrastructure Developers Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

MEP Infrastructure Developers pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, MEP Infrastructure Developers Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

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 4 warning signs for MEP Infrastructure Developers you should be aware of, and 2 of them are potentially serious.

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

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