How Much is Damodar Industries' (NSE:DAMODARIND) CEO Getting Paid?

Ajay Biyani became the CEO of Damodar Industries Limited (NSE:DAMODARIND) in 1998, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Damodar Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Damodar Industries

Comparing Damodar Industries Limited's CEO Compensation With the industry

Our data indicates that Damodar Industries Limited has a market capitalization of ₹728m, and total annual CEO compensation was reported as ₹6.7m for the year to March 2020. That's just a smallish increase of 7.7% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹6.7m.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹3.7m. Hence, we can conclude that Ajay Biyani is remunerated higher than the industry median. Moreover, Ajay Biyani also holds ₹116m worth of Damodar Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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. On a company level, Damodar Industries prefers to reward its CEO through a salary, opting not to pay Ajay Biyani through non-salary benefits. 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.

A Look at Damodar Industries Limited's Growth Numbers

Over the last three years, Damodar Industries Limited has shrunk its earnings per share by 103% per year. In the last year, its revenue is down 18%.

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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Damodar Industries Limited Been A Good Investment?

With a three year total loss of 40% for the shareholders, Damodar Industries Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Damodar Industries rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Damodar Industries pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for Damodar Industries you should be aware of, and 3 of them are potentially serious.

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.

If you decide to trade Damodar Industries, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.