Why Jay Bharat Maruti's (NSE:JAYBARMARU) CEO Pay Matters

Surendra Arya is the CEO of Jay Bharat Maruti Limited (NSE:JAYBARMARU), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Jay Bharat Maruti pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Jay Bharat Maruti

Comparing Jay Bharat Maruti Limited's CEO Compensation With the industry

Our data indicates that Jay Bharat Maruti Limited has a market capitalization of ₹5.7b, and total annual CEO compensation was reported as ₹28m for the year to March 2020. Notably, that's a decrease of 32% over the year before. Notably, the salary which is ₹23.5m, 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 ₹11m. Accordingly, our analysis reveals that Jay Bharat Maruti Limited pays Surendra Arya north of the industry median. Furthermore, Surendra Arya directly owns ₹82m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. Jay Bharat Maruti is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Jay Bharat Maruti Limited's Growth

Over the last three years, Jay Bharat Maruti Limited has shrunk its earnings per share by 57% per year. It saw its revenue drop 29% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Jay Bharat Maruti Limited Been A Good Investment?

With a three year total loss of 48% for the shareholders, Jay Bharat Maruti Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Jay Bharat Maruti pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. 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.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 6 warning signs for Jay Bharat Maruti you should be aware of, and 2 of them don't sit too well with us.

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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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