How Much Is Arvind's (NSE:ARVIND) CEO Getting Paid?

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

See our latest analysis for Arvind

Comparing Arvind Limited's CEO Compensation With the industry

At the time of writing, our data shows that Arvind Limited has a market capitalization of ₹17b, and reported total annual CEO compensation of ₹41m for the year to March 2020. We note that's a decrease of 34% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹10m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹7.3b and ₹29b had a median total CEO compensation of ₹20m. This suggests that Sanjaybhai Lalbhai is paid more than the median for the industry.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Arvind sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Arvind Limited's Growth

Over the last three years, Arvind Limited has shrunk its earnings per share by 71% per year. In the last year, its revenue is down 33%.

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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Arvind Limited Been A Good Investment?

Since shareholders would have lost about 81% over three years, some Arvind Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Sanjaybhai is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

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 1 which makes us a bit uncomfortable) in Arvind we think you should know about.

Switching gears from Arvind, 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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