Our View On Nitin Spinners' (NSE:NITINSPIN) CEO Pay

The CEO of Nitin Spinners Limited (NSE:NITINSPIN) is Dinesh Nolkha, and this article examines 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 Nitin Spinners.

View our latest analysis for Nitin Spinners

How Does Total Compensation For Dinesh Nolkha Compare With Other Companies In The Industry?

Our data indicates that Nitin Spinners Limited has a market capitalization of ₹4.3b, and total annual CEO compensation was reported as ₹7.8m for the year to March 2020. That's a notable decrease of 37% on last year. In particular, the salary of ₹4.32m, 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 ₹3.8m. Hence, we can conclude that Dinesh Nolkha is remunerated higher than the industry median. What's more, Dinesh Nolkha holds ₹119m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. In Nitin Spinners' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Nitin Spinners Limited's Growth Numbers

Nitin Spinners Limited has reduced its earnings per share by 38% a year over the last three years. It achieved revenue growth of 11% over the last year.

Few shareholders would be pleased to read that EPS have declined. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Nitin Spinners Limited Been A Good Investment?

Given the total shareholder loss of 25% over three years, many shareholders in Nitin Spinners Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Nitin Spinners Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 6 warning signs for Nitin Spinners you should be aware of, and 2 of them are a bit concerning.

Important note: Nitin Spinners 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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