What Did DCB Bank's (NSE:DCBBANK) CEO Take Home Last Year?

Murali Natrajan has been the CEO of DCB Bank Limited (NSE:DCBBANK) since 2009, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether DCB Bank pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for DCB Bank

Comparing DCB Bank Limited's CEO Compensation With the industry

At the time of writing, our data shows that DCB Bank Limited has a market capitalization of ₹29b, and reported total annual CEO compensation of ₹55m for the year to March 2020. Notably, that's an increase of 11% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹24m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹15b and ₹59b had a median total CEO compensation of ₹52m. This suggests that DCB Bank remunerates its CEO largely in line with the industry average. Furthermore, Murali Natrajan directly owns ₹196m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 73% of total compensation out of all the companies we analyzed, while other remuneration made up 27% of the pie. It's interesting to note that DCB Bank allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

DCB Bank Limited's Growth

Over the past three years, DCB Bank Limited has seen its earnings per share (EPS) grow by 11% per year. It saw its revenue drop 10% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 DCB Bank Limited Been A Good Investment?

With a three year total loss of 50% for the shareholders, DCB Bank Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Murali is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. But on the bright side, EPS growth is positive over the same period. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling DCB Bank (free visualization of insider trades).

Important note: DCB Bank 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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