How Is Munjal Showa's (NSE:MUNJALSHOW) CEO Paid Relative To Peers?

Yogesh Munjal is the CEO of Munjal Showa Limited (NSE:MUNJALSHOW), 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.

Check out our latest analysis for Munjal Showa

Comparing Munjal Showa Limited's CEO Compensation With the industry

Our data indicates that Munjal Showa Limited has a market capitalization of ₹5.5b, and total annual CEO compensation was reported as ₹58m for the year to March 2020. We note that's an increase of 23% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹27m.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹11m. Hence, we can conclude that Yogesh Munjal is remunerated higher than the industry median.

Talking in terms of the industry, salary represented approximately 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. Munjal Showa sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Munjal Showa Limited's Growth Numbers

Munjal Showa Limited has reduced its earnings per share by 33% a year over the last three years. It saw its revenue drop 35% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Munjal Showa Limited Been A Good Investment?

Given the total shareholder loss of 46% over three years, many shareholders in Munjal Showa Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Munjal Showa Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for Munjal Showa you should be aware of, and 1 of them is potentially serious.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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