This article will reflect on the compensation paid to Pradeep Khandagale who has served as CEO of Univastu India Limited (NSE:UNIVASTU) since 2011. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Univastu India.
See our latest analysis for Univastu India
How Does Total Compensation For Pradeep Khandagale Compare With Other Companies In The Industry?
At the time of writing, our data shows that Univastu India Limited has a market capitalization of ₹360m, and reported total annual CEO compensation of ₹4.2m for the year to March 2020. That's a fairly small increase of 7.7% over the previous year. Notably, the salary of ₹4.2m is the entirety of the CEO compensation.
For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹4.8m. So it looks like Univastu India compensates Pradeep Khandagale in line with the median for the industry. Moreover, Pradeep Khandagale also holds ₹245m worth of Univastu India stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | ₹4.2m | ₹3.9m | 100% |
| Other | - | - | - |
| Total Compensation | ₹4.2m | ₹3.9m | 100% |
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, Univastu India prefers to reward its CEO through a salary, opting not to pay Pradeep Khandagale 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 Univastu India Limited's Growth Numbers
Over the last three years, Univastu India Limited has shrunk its earnings per share by 3.4% per year. Its revenue is down 60% over the previous year.
Few shareholders would be pleased to read that EPS have declined. 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 Univastu India Limited Been A Good Investment?
Since shareholders would have lost about 15% over three years, some Univastu India Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Univastu India rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Pradeep is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 2 which are significant) in Univastu India we think you should know about.
Important note: Univastu India 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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About NSEI:UNIVASTU
Excellent balance sheet with proven track record.
