Does Maral Overseas' (NSE:MARALOVER) CEO Salary Compare Well With Industry Peers?

Shekhar Agarwal is the CEO of Maral Overseas Limited (NSE:MARALOVER), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Maral Overseas pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Maral Overseas

Comparing Maral Overseas Limited's CEO Compensation With the industry

According to our data, Maral Overseas Limited has a market capitalization of ₹537m, and paid its CEO total annual compensation worth ₹18m over the year to March 2020. Notably, that's a decrease of 24% over the year before. In particular, the salary of ₹17.2m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹3.9m. This suggests that Shekhar Agarwal is paid more than the median for the industry. Furthermore, Shekhar Agarwal directly owns ₹28m 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. Maral Overseas has gone down a largely traditional route, paying Shekhar Agarwal a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Maral Overseas Limited's Growth Numbers

Maral Overseas Limited has reduced its earnings per share by 103% a year over the last three years. It saw its revenue drop 27% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Maral Overseas Limited Been A Good Investment?

Since shareholders would have lost about 66% over three years, some Maral Overseas Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shekhar receives almost all of their compensation through a salary. As we noted earlier, Maral Overseas 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. To make matters worse, EPS growth has also been negative during this period. 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. We did our research and identified 3 warning signs (and 2 which make us uncomfortable) in Maral Overseas we think you should know about.

Important note: Maral Overseas is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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