The CEO of G N A Axles Limited (NSE:GNA) is Ranbir Seehra, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether G N A Axles pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for G N A Axles
Comparing G N A Axles Limited's CEO Compensation With the industry
According to our data, G N A Axles Limited has a market capitalization of ₹8.4b, and paid its CEO total annual compensation worth ₹19m over the year to March 2020. That's just a smallish increase of 7.0% on last year. We note that the salary portion, which stands at ₹10.7m constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹10m. This suggests that Ranbir Seehra is paid more than the median for the industry. What's more, Ranbir Seehra holds ₹1.4b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | ₹11m | ₹10m | 57% |
| Other | ₹8.0m | ₹7.4m | 43% |
| Total Compensation | ₹19m | ₹17m | 100% |
Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. G N A Axles pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
G N A Axles Limited's Growth
Over the last three years, G N A Axles Limited has shrunk its earnings per share by 2.2% per year. Its revenue is down 24% over the previous year.
The lack of EPS growth is certainly unimpressive. 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. 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 G N A Axles Limited Been A Good Investment?
Given the total shareholder loss of 4.7% over three years, many shareholders in G N A Axles Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As previously discussed, Ranbir 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. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for G N A Axles that investors should be aware of in a dynamic business environment.
Important note: G N A Axles 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.
When trading G N A Axles or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About NSEI:GNA
G N A Axles
Manufactures and sells auto components for the four-wheeler industry in North America, South America, Europe, Asia, and Australia.
Flawless balance sheet and fair value.
