How Is Signet Industries' (NSE:SIGIND) CEO Paid Relative To Peers?

This article will reflect on the compensation paid to Mukesh Sangla who has served as CEO of Signet Industries Limited (NSE:SIGIND) since 2014. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Signet Industries.

View our latest analysis for Signet Industries

Comparing Signet Industries Limited's CEO Compensation With the industry

Our data indicates that Signet Industries Limited has a market capitalization of ₹985m, and total annual CEO compensation was reported as ₹7.4m for the year to March 2020. Notably, that's a decrease of 12% over the year before. Notably, the salary of ₹7.4m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹1.4m. Accordingly, our analysis reveals that Signet Industries Limited pays Mukesh Sangla north of the industry median. Moreover, Mukesh Sangla also holds ₹202m worth of Signet Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. On a company level, Signet Industries prefers to reward its CEO through a salary, opting not to pay Mukesh Sangla through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Signet Industries Limited's Growth Numbers

Signet Industries Limited has reduced its earnings per share by 32% a year over the last three years. Its revenue is down 23% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Signet Industries Limited Been A Good Investment?

Since shareholders would have lost about 63% over three years, some Signet Industries Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Signet Industries rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Signet Industries pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 6 warning signs (and 2 which are significant) in Signet Industries we think you should know about.

Important note: Signet Industries 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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