Is Renaissance Global Limited (NSE:RGL) Overpaying Its CEO?

Hitesh Shah has been the CEO of Renaissance Global Limited (NSE:RGL) since 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Renaissance Global

How Does Hitesh Shah’s Compensation Compare With Similar Sized Companies?

According to our data, Renaissance Global Limited has a market capitalization of ₹4.8b, and paid its CEO total annual compensation worth ₹5.4m over the year to March 2019. Notably, the salary of ₹5.4m is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below ₹14b. The median CEO total compensation in that group is ₹2.3m.

As you can see, Hitesh Shah is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Renaissance Global Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Renaissance Global has changed over time.

NSEI:RGL CEO Compensation, October 21st 2019
NSEI:RGL CEO Compensation, October 21st 2019

Is Renaissance Global Limited Growing?

On average over the last three years, Renaissance Global Limited has grown earnings per share (EPS) by 24% each year (using a line of best fit). In the last year, its revenue is up 43%.

This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.

Has Renaissance Global Limited Been A Good Investment?

Boasting a total shareholder return of 65% over three years, Renaissance Global Limited has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.

In Summary…

We compared the total CEO remuneration paid by Renaissance Global Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Renaissance Global shares (free trial).

Important note: Renaissance Global may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.