Is Murudeshwar Ceramics Limited’s (NSE:MURUDCERA) CEO Pay Fair?

Satish Shetty is the CEO of Murudeshwar Ceramics Limited (NSE:MURUDCERA). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Murudeshwar Ceramics

How Does Satish Shetty’s Compensation Compare With Similar Sized Companies?

Our data indicates that Murudeshwar Ceramics Limited is worth ₹699m, and total annual CEO compensation is ₹6.0m. (This figure is for the year to March 2019). We think total compensation is more important but we note that the CEO salary is lower, at ₹5.1m. We looked at a group of companies with market capitalizations under ₹14b, and the median CEO total compensation was ₹1.5m.

It would therefore appear that Murudeshwar Ceramics Limited pays Satish Shetty 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Murudeshwar Ceramics has changed over time.

NSEI:MURUDCERA CEO Compensation, August 13th 2019
NSEI:MURUDCERA CEO Compensation, August 13th 2019

Is Murudeshwar Ceramics Limited Growing?

Murudeshwar Ceramics Limited has increased its earnings per share (EPS) by an average of 40% a year, over the last three years (using a line of best fit). Its revenue is up 5.4% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see modest revenue growth, suggesting the underlying business is healthy.

Has Murudeshwar Ceramics Limited Been A Good Investment?

Since shareholders would have lost about 43% over three years, some Murudeshwar Ceramics Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared total CEO remuneration at Murudeshwar Ceramics Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Murudeshwar Ceramics shares (free trial).

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We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.