What We Learned About Thomas Cook (India)'s (NSE:THOMASCOOK) CEO Compensation

Mahesh Iyer has been the CEO of Thomas Cook (India) Limited (NSE:THOMASCOOK) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Thomas Cook (India)

Comparing Thomas Cook (India) Limited's CEO Compensation With the industry

According to our data, Thomas Cook (India) Limited has a market capitalization of ₹18b, and paid its CEO total annual compensation worth ₹33m over the year to March 2020. That's a slightly lower by 5.1% over the previous year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹5.1m.

On examining similar-sized companies in the industry with market capitalizations between ₹7.3b and ₹29b, we discovered that the median CEO total compensation of that group was ₹7.1m. Hence, we can conclude that Mahesh Iyer is remunerated higher than the industry median. Moreover, Mahesh Iyer also holds ₹12m worth of Thomas Cook (India) stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. In Thomas Cook (India)'s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Thomas Cook (India) Limited's Growth

Over the last three years, Thomas Cook (India) Limited has shrunk its earnings per share by 101% per year. Its revenue is down 56% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Thomas Cook (India) Limited Been A Good Investment?

Since shareholders would have lost about 51% over three years, some Thomas Cook (India) Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Mahesh 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. 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.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Thomas Cook (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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