A Look At Salzer Electronics' (NSE:SALZERELEC) CEO Remuneration

The CEO of Salzer Electronics Limited (NSE:SALZERELEC) is Rajesh Doraiswamy, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Salzer Electronics pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Salzer Electronics

How Does Total Compensation For Rajesh Doraiswamy Compare With Other Companies In The Industry?

Our data indicates that Salzer Electronics Limited has a market capitalization of ₹2.2b, and total annual CEO compensation was reported as ₹6.5m for the year to March 2020. We note that's a decrease of 8.7% compared to last year. Notably, the salary which is ₹4.35m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹6.5m. This suggests that Salzer Electronics remunerates its CEO largely in line with the industry average. Moreover, Rajesh Doraiswamy also holds ₹34m worth of Salzer Electronics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 92% of total compensation represents salary and 8.2% is other remuneration. It's interesting to note that Salzer Electronics allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Salzer Electronics Limited's Growth

Salzer Electronics Limited has seen its earnings per share (EPS) increase by 4.8% a year over the past three years. In the last year, its revenue is down 12%.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Salzer Electronics Limited Been A Good Investment?

With a three year total loss of 37% for the shareholders, Salzer Electronics Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Salzer Electronics pays its CEO in line with similar-sized companies belonging to the same industry. This doesn't look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. We'd stop short of saying CEO compensation is inappropriate, but without an improvement in performance, it's sure to draw criticism. Shareholders will also not want to see performance improving before agreeing to any raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Salzer Electronics (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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