A Look At Banco Products (India)'s (NSE:BANCOINDIA) CEO Remuneration

Rajendra Anandpara has been the CEO of Banco Products (India) Limited (NSE:BANCOINDIA) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Banco Products (India).

See our latest analysis for Banco Products (India)

Comparing Banco Products (India) Limited's CEO Compensation With the industry

According to our data, Banco Products (India) Limited has a market capitalization of ₹11b, and paid its CEO total annual compensation worth ₹14m over the year to March 2020. That's a slight decrease of 5.4% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹14m.

In comparison with other companies in the industry with market capitalizations ranging from ₹7.3b to ₹29b, the reported median CEO total compensation was ₹22m. In other words, Banco Products (India) pays its CEO lower than the industry median.

On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. At the company level, Banco Products (India) pays Rajendra Anandpara solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Banco Products (India) Limited's Growth

Over the past three years, Banco Products (India) Limited has seen its earnings per share (EPS) grow by 1.0% per year. It saw its revenue drop 8.1% over the last year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Banco Products (India) Limited Been A Good Investment?

Given the total shareholder loss of 5.5% over three years, many shareholders in Banco Products (India) Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Banco Products (India) pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Rajendra is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But then, EPS growth is lacking and so are the returns to shareholders. So while we would not say that Rajendra is generously paid, it would be good to see an improvement in business performance before there is talk about a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Banco Products (India) (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Banco Products (India) is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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