How Much Is Alkali Metals Limited (NSE:ALKALI) CEO Getting Paid?

Yerramilli Srirama R. Rao has been the CEO of Alkali Metals Limited (NSE:ALKALI) since 2004, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Alkali Metals.

Check out our latest analysis for Alkali Metals

How Does Total Compensation For Yerramilli Srirama R. Rao Compare With Other Companies In The Industry?

According to our data, Alkali Metals Limited has a market capitalization of ₹583m, and paid its CEO total annual compensation worth ₹8.2m over the year to March 2020. That's a notable increase of 10% on last year. In particular, the salary of ₹7.58m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹6.3m. This suggests that Alkali Metals remunerates its CEO largely in line with the industry average. Furthermore, Yerramilli Srirama R. Rao directly owns ₹374m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. There isn't a significant difference between Alkali Metals and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Alkali Metals Limited's Growth

Over the last three years, Alkali Metals Limited has shrunk its earnings per share by 40% per year. It saw its revenue drop 37% over the last year.

Overall this is not a very positive result for shareholders. 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. 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 Alkali Metals Limited Been A Good Investment?

Since shareholders would have lost about 35% over three years, some Alkali Metals Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Alkali Metals Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Alkali Metals you should be aware of, and 3 of them don't sit too well with us.

Important note: Alkali Metals 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.

When trading Alkali Metals or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on 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.