How Much Is Shivam Autotech's (NSE:SHIVAMAUTO) CEO Getting Paid?

Neeraj Munjal became the CEO of Shivam Autotech Limited (NSE:SHIVAMAUTO) in 2006, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Shivam Autotech pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Shivam Autotech

How Does Total Compensation For Neeraj Munjal Compare With Other Companies In The Industry?

Our data indicates that Shivam Autotech Limited has a market capitalization of ₹2.3b, and total annual CEO compensation was reported as ₹19m for the year to March 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of ₹9.60m, makes up a huge portion of the total compensation being paid to the CEO.

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 Neeraj Munjal is remunerated higher than the industry median.

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Shivam Autotech sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Shivam Autotech Limited's Growth Numbers

Over the last three years, Shivam Autotech Limited has shrunk its earnings per share by 103% per year. In the last year, its revenue is down 31%.

Few shareholders would be pleased to read that EPS have declined. 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. 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 Shivam Autotech Limited Been A Good Investment?

Since shareholders would have lost about 75% over three years, some Shivam Autotech Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Shivam Autotech pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which is significant) in Shivam Autotech we think you should know about.

Important note: Shivam Autotech 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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