Rajendar Rewari became the CEO of Morarjee Textiles Limited (NSE:MORARJEE) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Morarjee Textiles.
See our latest analysis for Morarjee Textiles
Comparing Morarjee Textiles Limited's CEO Compensation With the industry
Our data indicates that Morarjee Textiles Limited has a market capitalization of ₹476m, and total annual CEO compensation was reported as ₹14m for the year to March 2020. That's a slightly lower by 3.3% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹6.8m.
For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹3.7m. Hence, we can conclude that Rajendar Rewari is remunerated higher than the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | ₹6.8m | ₹6.8m | 49% |
| Other | ₹7.1m | ₹7.6m | 51% |
| Total Compensation | ₹14m | ₹14m | 100% |
Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Morarjee Textiles sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Morarjee Textiles Limited's Growth Numbers
Morarjee Textiles Limited has reduced its earnings per share by 70% a year over the last three years. Its revenue is down 45% over the previous year.
Few shareholders would be pleased to read that EPS have declined. 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 Morarjee Textiles Limited Been A Good Investment?
Given the total shareholder loss of 76% over three years, many shareholders in Morarjee Textiles Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, Morarjee Textiles 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. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Morarjee Textiles that you should be aware of before investing.
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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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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About NSEI:MORARJEE
Morarjee Textiles
Engages in the manufacture and sale of yarns and fabrics in India and internationally.
Slight and slightly overvalued.
