Here's What We Think About Dollar Industries' (NSE:DOLLAR) CEO Pay

Vinod Gupta is the CEO of Dollar Industries Limited (NSE:DOLLAR), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Dollar Industries

Comparing Dollar Industries Limited's CEO Compensation With the industry

According to our data, Dollar Industries Limited has a market capitalization of ₹13b, and paid its CEO total annual compensation worth ₹11m over the year to March 2020. That's just a smallish increase of 4.6% on last year. In particular, the salary of ₹10.2m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between ₹7.4b and ₹29b, we discovered that the median CEO total compensation of that group was ₹20m. In other words, Dollar Industries pays its CEO lower than the industry median. Furthermore, Vinod Gupta directly owns ₹525m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Dollar Industries sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Dollar Industries Limited's Growth

Dollar Industries Limited has seen its earnings per share (EPS) increase by 8.9% a year over the past three years. Its revenue is down 11% over the previous year.

We would prefer it if there was revenue growth, but the modest EPSgrowth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Dollar Industries Limited Been A Good Investment?

With a three year total loss of 50% for the shareholders, Dollar Industries Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Dollar Industries pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But then, EPS growth is lacking and so are the returns to shareholders. So while we would not say that Vinod is generously paid, it would be good to see an improvement in business performance before there is talk about a raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Dollar Industries that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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