Here's What We Learned About The CEO Pay At JMT Auto Limited (NSE:JMTAUTOLTD)

Sanjay Tiku is the CEO of JMT Auto Limited (NSE:JMTAUTOLTD), and in this article, we analyze the executive's compensation package 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.

View our latest analysis for JMT Auto

Comparing JMT Auto Limited's CEO Compensation With the industry

At the time of writing, our data shows that JMT Auto Limited has a market capitalization of ₹1.5b, and reported total annual CEO compensation of ₹5.5m for the year to March 2020. That is, the compensation was roughly the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹5.5m.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹10m. That is to say, Sanjay Tiku is paid under the industry median.

On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. On a company level, JMT Auto prefers to reward its CEO through a salary, opting not to pay Sanjay Tiku through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at JMT Auto Limited's Growth Numbers

JMT Auto Limited has reduced its earnings per share by 59% a year over the last three years. In the last year, its revenue is down 37%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has JMT Auto Limited Been A Good Investment?

Since shareholders would have lost about 42% over three years, some JMT Auto Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

JMT Auto pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, JMT Auto pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.

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 3 warning signs for JMT Auto you should be aware of, and 1 of them is a bit concerning.

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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