How Is Superhouse's (NSE:SUPERHOUSE) CEO Compensated?

Mukhtarul Amin became the CEO of Superhouse Limited (NSE:SUPERHOUSE) in 2006, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Superhouse

Comparing Superhouse Limited's CEO Compensation With the industry

Our data indicates that Superhouse Limited has a market capitalization of ₹1.4b, and total annual CEO compensation was reported as ₹11m for the year to March 2020. That's a notable decrease of 10% on last year. Notably, the salary which is ₹9.50m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.6m. Hence, we can conclude that Mukhtarul Amin is remunerated higher than the industry median. Moreover, Mukhtarul Amin also holds ₹164m worth of Superhouse stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Superhouse sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Superhouse Limited's Growth

Superhouse Limited has seen its earnings per share (EPS) increase by 13% a year over the past three years. It saw its revenue drop 25% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Superhouse Limited Been A Good Investment?

Given the total shareholder loss of 19% over three years, many shareholders in Superhouse Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Superhouse pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Considering overall performance, we can't say Mukhtarul is underpaid, in fact compensation is definitely on the higher side.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Superhouse that investors should be aware of in a dynamic business environment.

Important note: Superhouse 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.

If you decide to trade Superhouse, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.