How Much Does Jain Irrigation Systems' (NSE:JISLDVREQS) CEO Make?

Anil Jain became the CEO of Jain Irrigation Systems Limited (NSE:JISLDVREQS) in 1992, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Jain Irrigation Systems.

See our latest analysis for Jain Irrigation Systems

Comparing Jain Irrigation Systems Limited's CEO Compensation With the industry

According to our data, Jain Irrigation Systems Limited has a market capitalization of ₹11b, and paid its CEO total annual compensation worth ₹35m over the year to March 2020. Notably, that's a decrease of 50% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹16m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹4.8m. Accordingly, our analysis reveals that Jain Irrigation Systems Limited pays Anil Jain north of the industry median. What's more, Anil Jain holds ₹12m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 93% of total compensation represents salary and 7.3% is other remuneration. It's interesting to note that Jain Irrigation Systems allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Jain Irrigation Systems Limited's Growth Numbers

Over the last three years, Jain Irrigation Systems Limited has shrunk its earnings per share by 110% per year. Its revenue is down 29% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. 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 Jain Irrigation Systems Limited Been A Good Investment?

With a three year total loss of 83% for the shareholders, Jain Irrigation Systems Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Jain Irrigation Systems pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. 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 3 warning signs for Jain Irrigation Systems you should be aware of, and 2 of them are a bit unpleasant.

Important note: Jain Irrigation Systems 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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