Why Nath Bio-Genes (India)'s (NSE:NATHBIOGEN) CEO Pay Matters

The CEO of Nath Bio-Genes (India) Limited (NSE:NATHBIOGEN) is Satish Kagliwal, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Nath Bio-Genes (India)

Comparing Nath Bio-Genes (India) Limited's CEO Compensation With the industry

At the time of writing, our data shows that Nath Bio-Genes (India) Limited has a market capitalization of ₹5.6b, and reported total annual CEO compensation of ₹4.8m for the year to March 2020. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹4.8m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.6m. Accordingly, our analysis reveals that Nath Bio-Genes (India) Limited pays Satish Kagliwal north of the industry median.

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. On a company level, Nath Bio-Genes (India) prefers to reward its CEO through a salary, opting not to pay Satish Kagliwal through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Nath Bio-Genes (India) Limited's Growth Numbers

Nath Bio-Genes (India) Limited's earnings per share (EPS) grew 27% per year over the last three years. Its revenue is up 16% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Nath Bio-Genes (India) Limited Been A Good Investment?

With a three year total loss of 36% for the shareholders, Nath Bio-Genes (India) Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Nath Bio-Genes (India) pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Nath Bio-Genes (India) pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Satish is earning a very handsome sum.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Nath Bio-Genes (India) that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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