What Did Liberty Shoes Limited's (NSE:LIBERTSHOE) CEO Take Home Last Year?

In 2004 Adesh Gupta was appointed CEO of Liberty Shoes Limited (NSE:LIBERTSHOE). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Liberty Shoes

How Does Adesh Gupta's Compensation Compare With Similar Sized Companies?

Our data indicates that Liberty Shoes Limited is worth ₹1.4b, and total annual CEO compensation was reported as ₹4.8m for the year to March 2019. It is worth noting that the CEO compensation consists almost entirely of the salary, worth ₹4.8m. We looked at a group of companies with market capitalizations under ₹15b, and the median CEO total compensation was ₹3.6m.

Thus we can conclude that Adesh Gupta receives more in total compensation than the median of a group of companies in the same market, and of similar size to Liberty Shoes Limited. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Liberty Shoes has changed over time.

Is Liberty Shoes Limited Growing?

Liberty Shoes Limited has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). In the last year, its revenue changed by just 0.7%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Liberty Shoes Limited Been A Good Investment?

Since shareholders would have lost about 51% over three years, some Liberty Shoes Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Liberty Shoes Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. CEO compensation is an important area to keep your eyes on, but we've also identified 5 warning signs for Liberty Shoes (2 are concerning!) that you should be aware of before investing here.

If you want to buy a stock that is better than Liberty Shoes, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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