What Can We Conclude About Asian Hotels (North)'s (NSE:ASIANHOTNR) CEO Pay?

The CEO of Asian Hotels (North) Limited (NSE:ASIANHOTNR) is Shiv Jatia, 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 Asian Hotels (North).

View our latest analysis for Asian Hotels (North)

Comparing Asian Hotels (North) Limited's CEO Compensation With the industry

According to our data, Asian Hotels (North) Limited has a market capitalization of ₹1.4b, and paid its CEO total annual compensation worth ₹23m over the year to March 2020. That's a notable increase of 10% on last year. Notably, the salary of ₹23m is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹2.8m. Hence, we can conclude that Shiv Jatia is remunerated higher than the industry median. Furthermore, Shiv Jatia directly owns ₹63m worth of shares in the company, implying that they are deeply invested in the company's success.

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, Asian Hotels (North) prefers to reward its CEO through a salary, opting not to pay Shiv Jatia 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.

Asian Hotels (North) Limited's Growth

Asian Hotels (North) Limited has reduced its earnings per share by 70% a year over the last three years. It saw its revenue drop 67% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Asian Hotels (North) Limited Been A Good Investment?

With a three year total loss of 73% for the shareholders, Asian Hotels (North) Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Asian Hotels (North) pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Shiv is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 1 which can't be ignored) in Asian Hotels (North) we think you should know about.

Switching gears from Asian Hotels (North), if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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