What Can We Make Of Himatsingka Seide's (NSE:HIMATSEIDE) CEO Compensation?

SKH Himatsingka has been the CEO of Himatsingka Seide Limited (NSE:HIMATSEIDE) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Himatsingka Seide pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Himatsingka Seide

How Does Total Compensation For SKH Himatsingka Compare With Other Companies In The Industry?

Our data indicates that Himatsingka Seide Limited has a market capitalization of ₹14b, and total annual CEO compensation was reported as ₹85m for the year to March 2020. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹21m.

In comparison with other companies in the industry with market capitalizations ranging from ₹7.3b to ₹29b, the reported median CEO total compensation was ₹22m. This suggests that SKH Himatsingka is paid more than the median for the industry. Moreover, SKH Himatsingka also holds ₹1.2b worth of Himatsingka Seide 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. In Himatsingka Seide's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Himatsingka Seide Limited's Growth

Himatsingka Seide Limited has reduced its earnings per share by 65% a year over the last three years. In the last year, its revenue is down 28%.

Overall this is not a very positive result for shareholders. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Himatsingka Seide Limited Been A Good Investment?

Given the total shareholder loss of 62% over three years, many shareholders in Himatsingka Seide Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Himatsingka Seide 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. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Himatsingka Seide that investors should be aware of in a dynamic business environment.

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 Himatsingka Seide, 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.