Here's What We Think About Ankit Metal & Power's (NSE:ANKITMETAL) CEO Pay

Ankit Patni became the CEO of Ankit Metal & Power Limited (NSE:ANKITMETAL) in 2018, and we think it's a good time to look at 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.

See our latest analysis for Ankit Metal & Power

How Does Total Compensation For Ankit Patni Compare With Other Companies In The Industry?

Our data indicates that Ankit Metal & Power Limited has a market capitalization of ₹140m, and total annual CEO compensation was reported as ₹6.0m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹6.0m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹4.8m. This suggests that Ankit Metal & Power remunerates its CEO largely in line with the industry average. What's more, Ankit Patni holds ₹2.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 96% of total compensation represents salary and 3.9% is other remuneration. On a company level, Ankit Metal & Power prefers to reward its CEO through a salary, opting not to pay Ankit Patni through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Ankit Metal & Power Limited's Growth

Ankit Metal & Power Limited has seen its earnings per share (EPS) increase by 52% a year over the past three years. In the last year, its revenue is down 27%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Ankit Metal & Power Limited Been A Good Investment?

Since shareholders would have lost about 27% over three years, some Ankit Metal & Power Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Ankit Metal & Power rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Ankit Metal & Power pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. However, EPS growth is positive over the same time frame. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Ankit Metal & Power you should be aware of, and 1 of them is potentially serious.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

If you’re looking to trade Ankit Metal & Power, 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@simplywallst.com.