Prakarsh Gagdani became the CEO of 5paisa Capital Limited (NSE:5PAISA) in 2018, 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 assess whether 5paisa Capital pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing 5paisa Capital Limited's CEO Compensation With the industry
At the time of writing, our data shows that 5paisa Capital Limited has a market capitalization of ₹8.4b, and reported total annual CEO compensation of ₹10m for the year to March 2020. We note that's an increase of 35% above last year. In particular, the salary of ₹9.93m, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹894k. Accordingly, our analysis reveals that 5paisa Capital Limited pays Prakarsh Gagdani north of the industry median.
On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. 5paisa Capital pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
5paisa Capital Limited's Growth
5paisa Capital Limited has seen its earnings per share (EPS) increase by 81% a year over the past three years. It achieved revenue growth of 82% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 5paisa Capital Limited Been A Good Investment?
Boasting a total shareholder return of 163% over three years, 5paisa Capital Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
5paisa Capital pays its CEO a majority of compensation through a salary. As previously discussed, Prakarsh is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, 5paisa Capital has produced strong EPS growth and shareholder returns over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Prakarsh deserves a raise!
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 2 warning signs for 5paisa Capital that investors should think about before committing capital to this stock.
Switching gears from 5paisa Capital, 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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