What Does Emami's (NSE:EMAMILTD) CEO Pay Reveal?

Sushil Goenka is the CEO of Emami Limited (NSE:EMAMILTD), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Emami pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Emami

Comparing Emami Limited's CEO Compensation With the industry

At the time of writing, our data shows that Emami Limited has a market capitalization of ₹189b, and reported total annual CEO compensation of ₹14m for the year to March 2020. Notably, that's an increase of 11% over the year before. In particular, the salary of ₹12.6m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₹147b and ₹471b had a median total CEO compensation of ₹54m. That is to say, Sushil Goenka is paid under the industry median. Furthermore, Sushil Goenka directly owns ₹527m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. It's interesting to note that Emami allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Emami Limited's Growth Numbers

Emami Limited's earnings per share (EPS) grew 1.2% per year over the last three years. Its revenue is down 7.2% over the previous year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Emami Limited Been A Good Investment?

Given the total shareholder loss of 32% over three years, many shareholders in Emami Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Emami Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But then, EPS growth is lacking and so are the returns to shareholders. So while we don't think, Sushil is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Emami that investors should think about before committing capital to this stock.

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.

If you’re looking to trade Emami, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.