The CEO of Edelweiss Financial Services Limited (NSE:EDELWEISS) is Rashesh Shah. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Rashesh Shah’s Compensation Compare With Similar Sized Companies?
According to our data, Edelweiss Financial Services Limited has a market capitalization of ₹97b, and paid its CEO total annual compensation worth ₹73m over the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at ₹13m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from ₹71b to ₹228b, and the median CEO total compensation was ₹46m.
Thus we can conclude that Rashesh Shah receives more in total compensation than the median of a group of companies in the same market, and of similar size to Edelweiss Financial Services Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Edelweiss Financial Services has changed over time.
Is Edelweiss Financial Services Limited Growing?
Over the last three years Edelweiss Financial Services Limited has grown its earnings per share (EPS) by an average of 13% per year (using a line of best fit). In the last year, its revenue is down 13%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.
Has Edelweiss Financial Services Limited Been A Good Investment?
Edelweiss Financial Services Limited has generated a total shareholder return of 14% over three years, so most shareholders would be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at Edelweiss Financial Services Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Edelweiss Financial Services (free visualization of insider trades).
If you want to buy a stock that is better than Edelweiss Financial Services, this free list of high return, low debt companies is a great place to look.
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