What We Learned About MIRC Electronics' (NSE:MIRCELECTR) CEO Pay

G. Sundar became the CEO of MIRC Electronics Limited (NSE:MIRCELECTR) in 2014, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for MIRC Electronics.

View our latest analysis for MIRC Electronics

Comparing MIRC Electronics Limited's CEO Compensation With the industry

Our data indicates that MIRC Electronics Limited has a market capitalization of ₹1.9b, and total annual CEO compensation was reported as ₹23m for the year to March 2020. Notably, that's a decrease of 26% over the year before. Notably, the salary which is ₹22.6m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹4.5m. Hence, we can conclude that G. Sundar is remunerated higher than the industry median. Moreover, G. Sundar also holds ₹3.4m worth of MIRC Electronics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 98% of total compensation represents salary and 2.3% is other remuneration. MIRC Electronics is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at MIRC Electronics Limited's Growth Numbers

Over the last three years, MIRC Electronics Limited has shrunk its earnings per share by 112% per year. It saw its revenue drop 16% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 MIRC Electronics Limited Been A Good Investment?

With a three year total loss of 70% for the shareholders, MIRC Electronics Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

MIRC Electronics pays its CEO a majority of compensation through a salary. As previously discussed, G. is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for MIRC Electronics you should be aware of, and 2 of them make us uncomfortable.

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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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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