Here's What We Learned About The CEO Pay At Sanghvi Movers Limited (NSE:SANGHVIMOV)

This article will reflect on the compensation paid to Sham Kajale who has served as CEO of Sanghvi Movers Limited (NSE:SANGHVIMOV) since 2017. This analysis will also assess whether Sanghvi Movers pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Sanghvi Movers

Comparing Sanghvi Movers Limited's CEO Compensation With the industry

According to our data, Sanghvi Movers Limited has a market capitalization of ₹4.7b, and paid its CEO total annual compensation worth ₹13m over the year to March 2020. Notably, that's an increase of 9.7% over the year before. Notably, the salary which is ₹9.16m, 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 ₹1.5m. Accordingly, our analysis reveals that Sanghvi Movers Limited pays Sham Kajale north of the industry median.

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. It's interesting to note that Sanghvi Movers allocates a smaller portion of compensation to salary in comparison to the broader 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.

Sanghvi Movers Limited's Growth

Over the last three years, Sanghvi Movers Limited has shrunk its earnings per share by 7.0% per year. In the last year, its revenue is down 22%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Sanghvi Movers Limited Been A Good Investment?

Given the total shareholder loss of 36% over three years, many shareholders in Sanghvi Movers Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Sanghvi Movers Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Sanghvi Movers (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Sanghvi Movers, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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