It's Unlikely That Geojit Financial Services Limited's (NSE:GEOJITFSL) CEO Will See A Huge Pay Rise This Year

By
Simply Wall St
Published
July 23, 2021
NSEI:GEOJITFSL
Source: Shutterstock

Under the guidance of CEO Chenayappillil George, Geojit Financial Services Limited (NSE:GEOJITFSL) has performed reasonably well recently. As shareholders go into the upcoming AGM on 30 July 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Geojit Financial Services

Comparing Geojit Financial Services Limited's CEO Compensation With the industry

Our data indicates that Geojit Financial Services Limited has a market capitalization of ₹22b, and total annual CEO compensation was reported as ₹33m for the year to March 2021. That's a notable increase of 66% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹10m.

In comparison with other companies in the industry with market capitalizations ranging from ₹7.4b to ₹30b, the reported median CEO total compensation was ₹9.1m. This suggests that Chenayappillil George is paid more than the median for the industry. What's more, Chenayappillil George holds ₹4.5b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary ₹10m ₹9.2m 32%
Other ₹22m ₹10m 68%
Total Compensation₹33m ₹20m100%

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. In Geojit Financial Services' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
NSEI:GEOJITFSL CEO Compensation July 24th 2021

Geojit Financial Services Limited's Growth

Over the past three years, Geojit Financial Services Limited has seen its earnings per share (EPS) grow by 19% per year. In the last year, its revenue is up 39%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Geojit Financial Services Limited Been A Good Investment?

Boasting a total shareholder return of 33% over three years, Geojit Financial Services Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Geojit Financial Services (1 is a bit concerning!) that you should be aware of before investing here.

Important note: Geojit Financial Services is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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