How Should Investors Feel About Mahindra Holidays & Resorts India's (NSE:MHRIL) CEO Remuneration?

Kavinder Singh has been the CEO of Mahindra Holidays & Resorts India Limited (NSE:MHRIL) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Mahindra Holidays & Resorts India pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Mahindra Holidays & Resorts India

How Does Total Compensation For Kavinder Singh Compare With Other Companies In The Industry?

At the time of writing, our data shows that Mahindra Holidays & Resorts India Limited has a market capitalization of ₹30b, and reported total annual CEO compensation of ₹46m for the year to March 2020. That's a notable increase of 12% on last year. Notably, the salary which is ₹30.5m, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between ₹15b and ₹58b, we discovered that the median CEO total compensation of that group was ₹22m. Accordingly, our analysis reveals that Mahindra Holidays & Resorts India Limited pays Kavinder Singh north of the industry median.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. It's interesting to note that Mahindra Holidays & Resorts India allocates a smaller portion of compensation to salary 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 Mahindra Holidays & Resorts India Limited's Growth Numbers

Over the last three years, Mahindra Holidays & Resorts India Limited has shrunk its earnings per share by 110% per year. It saw its revenue drop 21% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Mahindra Holidays & Resorts India Limited Been A Good Investment?

With a three year total loss of 21% for the shareholders, Mahindra Holidays & Resorts India Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Mahindra Holidays & Resorts India 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. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Mahindra Holidays & Resorts India that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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