Our Take On Emkay Global Financial Services' (NSE:EMKAY) CEO Salary

Krishna Karwa became the CEO of Emkay Global Financial Services Limited (NSE:EMKAY) in 2010, 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 Emkay Global Financial Services pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Emkay Global Financial Services

Comparing Emkay Global Financial Services Limited's CEO Compensation With the industry

Our data indicates that Emkay Global Financial Services Limited has a market capitalization of ₹2.0b, and total annual CEO compensation was reported as ₹11m for the year to March 2020. Notably, that's an increase of 21% over the year before. Notably, the salary which is ₹10.2m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹898k. This suggests that Krishna Karwa is paid more than the median for the industry. Moreover, Krishna Karwa also holds ₹549m worth of Emkay Global Financial Services 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. Emkay Global Financial Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Emkay Global Financial Services Limited's Growth

Emkay Global Financial Services Limited has reduced its earnings per share by 93% a year over the last three years. Its revenue is up 5.6% over the last year.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Emkay Global Financial Services Limited Been A Good Investment?

Given the total shareholder loss of 62% over three years, many shareholders in Emkay Global Financial Services Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Emkay Global Financial Services pays its CEO higher than the norm for similar-sized companies belonging 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. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Emkay Global Financial Services (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Emkay Global Financial Services, 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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