Kapil Wadhawan has been the CEO of Dewan Housing Finance Corporation Limited (NSE:DHFL) since 2000. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Dewan Housing Finance
How Does Kapil Wadhawan's Compensation Compare With Similar Sized Companies?
According to our data, Dewan Housing Finance Corporation Limited has a market capitalization of ₹15b, and pays its CEO total annual compensation worth ₹40m. (This number is for the twelve months until March 2018). While we always look at total compensation first, we note that the salary component is less, at ₹23m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ₹7.2b to ₹29b. The median total CEO compensation was ₹20m.
It would therefore appear that Dewan Housing Finance Corporation Limited pays Kapil Wadhawan more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Dewan Housing Finance has changed over time.
Is Dewan Housing Finance Corporation Limited Growing?
Dewan Housing Finance Corporation Limited has reduced its earnings per share by an average of 48% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 21% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO.
Has Dewan Housing Finance Corporation Limited Been A Good Investment?
With a three year total loss of 83%, Dewan Housing Finance Corporation Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared the total CEO remuneration paid by Dewan Housing Finance Corporation Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Dewan Housing Finance.
Important note: Dewan Housing Finance may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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