What We Learned About Speciality Restaurants' (NSE:SPECIALITY) CEO Pay

Anjan Chatterjee has been the CEO of Speciality Restaurants Limited (NSE:SPECIALITY) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Speciality Restaurants pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Speciality Restaurants

How Does Total Compensation For Anjan Chatterjee Compare With Other Companies In The Industry?

Our data indicates that Speciality Restaurants Limited has a market capitalization of ₹2.2b, and total annual CEO compensation was reported as ₹5.8m for the year to March 2020. That's a slight decrease of 4.1% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹5.8m.

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 Anjan Chatterjee is remunerated higher than the industry median. Moreover, Anjan Chatterjee also holds ₹568m worth of Speciality Restaurants 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. At the company level, Speciality Restaurants pays Anjan Chatterjee solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Speciality Restaurants Limited's Growth Numbers

Speciality Restaurants Limited has reduced its earnings per share by 49% a year over the last three years. Its revenue is down 56% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Speciality Restaurants Limited Been A Good Investment?

Given the total shareholder loss of 69% over three years, many shareholders in Speciality Restaurants 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...

Speciality Restaurants pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Anjan is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Arguably worse, we've been waiting for positive EPS growth for the last three years. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which makes us a bit uncomfortable) in Speciality Restaurants we think you should know about.

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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