Increases to Paramount Communications Limited's (NSE:PARACABLES) CEO Compensation Might Cool off for now

Performance at Paramount Communications Limited (NSE:PARACABLES) has been reasonably good and CEO Sanjay Aggarwal has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29 September 2022. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Paramount Communications

Comparing Paramount Communications Limited's CEO Compensation With The Industry

Our data indicates that Paramount Communications Limited has a market capitalization of ₹3.5b, and total annual CEO compensation was reported as ₹18m for the year to March 2022. Notably, that's an increase of 17% over the year before. In particular, the salary of ₹16.1m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under ₹16b, the reported median total CEO compensation was ₹5.0m. Hence, we can conclude that Sanjay Aggarwal is remunerated higher than the industry median. Furthermore, Sanjay Aggarwal directly owns ₹761m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	₹16m	₹14m	90%
Other	₹1.8m	₹1.5m	10%
Total Compensation	₹18m	₹15m	100%

On an industry level, around 71% of total compensation represents salary and 29% is other remuneration. According to our research, Paramount Communications has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Paramount Communications Limited's Growth

Paramount Communications Limited has reduced its earnings per share by 24% a year over the last three years. It achieved revenue growth of 22% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Paramount Communications Limited Been A Good Investment?

We think that the total shareholder return of 90%, over three years, would leave most Paramount Communications Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. Until EPS growth picks back up, we think shareholders may find it hard to justify increasing CEO pay given that they are already paid above industry average.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Paramount Communications you should be aware of, and 2 of them are potentially serious.

Important note: Paramount Communications 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.