How Much Is L&T Finance Holdings Limited (NSE:L&TFH) CEO Getting Paid?

The CEO of L&T Finance Holdings Limited (NSE:L&TFH) is Dinanath Dubhashi, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for L&T Finance Holdings.

Check out our latest analysis for L&T Finance Holdings

Comparing L&T Finance Holdings Limited's CEO Compensation With the industry

According to our data, L&T Finance Holdings Limited has a market capitalization of ₹173b, and paid its CEO total annual compensation worth ₹108m over the year to March 2020. We note that's an increase of 84% above last year. We note that the salary portion, which stands at ₹94.2m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₹74b and ₹236b had a median total CEO compensation of ₹91m. This suggests that L&T Finance Holdings remunerates its CEO largely in line with the industry average. Moreover, Dinanath Dubhashi also holds ₹39m worth of L&T Finance Holdings 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. It's interesting to note that L&T Finance Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

L&T Finance Holdings Limited's Growth

L&T Finance Holdings Limited has seen its earnings per share (EPS) increase by 1.9% a year over the past three years. It saw its revenue drop 2.6% over the last year.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has L&T Finance Holdings Limited Been A Good Investment?

With a three year total loss of 47% for the shareholders, L&T Finance Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Dinanath is compensated close to the median for companies of its size, and which belong to the same industry. This doesn't look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Dinanath deserves a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for L&T Finance Holdings you should be aware of, and 1 of them is potentially serious.

Switching gears from L&T Finance Holdings, 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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