We Think Sammaan Capital Limited's (NSE:SAMMAANCAP) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• Sammaan Capital will host its Annual General Meeting on 27th of September
• Salary of ₹105.9m is part of CEO Gagan Banga's total remuneration
• The overall pay is 291% above the industry average
• Sammaan Capital's three-year loss to shareholders was 17% while its EPS was down 15% over the past three years

Sammaan Capital Limited (NSE:SAMMAANCAP) has not performed well recently and CEO Gagan Banga will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 27th of September. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Sammaan Capital

How Does Total Compensation For Gagan Banga Compare With Other Companies In The Industry?

Our data indicates that Sammaan Capital Limited has a market capitalization of ₹119b, and total annual CEO compensation was reported as ₹106m for the year to March 2024. This was the same as last year. Notably, the salary of ₹106m is the entirety of the CEO compensation.

On examining similar-sized companies in the Indian Diversified Financial industry with market capitalizations between ₹84b and ₹267b, we discovered that the median CEO total compensation of that group was ₹27m. Hence, we can conclude that Gagan Banga is remunerated higher than the industry median. What's more, Gagan Banga holds ₹655m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹106m	₹106m	100%
Other	-	-	-
Total Compensation	₹106m	₹106m	100%

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. At the company level, Sammaan Capital pays Gagan Banga solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Sammaan Capital Limited's Growth Numbers

Over the last three years, Sammaan Capital Limited has shrunk its earnings per share by 15% per year. Its revenue is down 4.5% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Sammaan Capital Limited Been A Good Investment?

Given the total shareholder loss of 17% over three years, many shareholders in Sammaan Capital Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Sammaan Capital rewards its CEO solely through a salary, ignoring non-salary benefits completely. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 3 which shouldn't be ignored) in Sammaan Capital we think you should know about.

Switching gears from Sammaan 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.