Key Things To Understand About MIRC Electronics' (NSE:MIRCELECTR) CEO Pay Cheque

This article will reflect on the compensation paid to G. Sundar who has served as CEO of MIRC Electronics Limited (NSE:MIRCELECTR) since 2014. 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 MIRC Electronics

How Does Total Compensation For G. Sundar Compare With Other Companies In The Industry?

Our data indicates that MIRC Electronics Limited has a market capitalization of ₹3.4b, and total annual CEO compensation was reported as ₹23m for the year to March 2020. That's a notable decrease of 26% on last year. Notably, the salary which is ₹22.6m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹4.1m. Hence, we can conclude that G. Sundar is remunerated higher than the industry median. Furthermore, G. Sundar directly owns ₹6.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 97% of total compensation represents salary, while the remainder of 3.2% is other remuneration. MIRC Electronics is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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 MIRC Electronics Limited's Growth Numbers

Over the last three years, MIRC Electronics Limited has shrunk its earnings per share by 124% per year. Its revenue is up 18% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has MIRC Electronics Limited Been A Good Investment?

Since shareholders would have lost about 72% over three years, some MIRC Electronics Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

MIRC Electronics pays its CEO a majority of compensation through a salary. As we noted earlier, MIRC Electronics pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Meanwhile, the company has been unable to show any EPS growth, and shareholder returns are also in the red. In contrast, revenue growth for the company has been showing a positive trend. Few would argue that it's wise for the company to pay any more, before returns improve.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for MIRC Electronics (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

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.

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