How Should Investors Feel About Pioneer Embroideries' (NSE:PIONEEREMB) CEO Remuneration?

This article will reflect on the compensation paid to Harsh Bassi who has served as CEO of Pioneer Embroideries Limited (NSE:PIONEEREMB) since 2014. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Pioneer Embroideries.

View our latest analysis for Pioneer Embroideries

Comparing Pioneer Embroideries Limited's CEO Compensation With the industry

Our data indicates that Pioneer Embroideries Limited has a market capitalization of ₹1.2b, and total annual CEO compensation was reported as ₹4.1m for the year to March 2020. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹4.1m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹3.7m. This suggests that Pioneer Embroideries remunerates its CEO largely in line with the industry average.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. On a company level, Pioneer Embroideries prefers to reward its CEO through a salary, opting not to pay Harsh Bassi through 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.

Pioneer Embroideries Limited's Growth

Pioneer Embroideries Limited has seen its earnings per share (EPS) increase by 75% a year over the past three years. Its revenue is down 23% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Pioneer Embroideries Limited Been A Good Investment?

Pioneer Embroideries Limited has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Pioneer Embroideries pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Harsh is compensated close to the median for companies of its size, and which belong to the same industry. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Pioneer Embroideries that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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