What Can We Make Of Arrow Greentech's (NSE:ARROWGREEN) CEO Compensation?

Shilpan Patel is the CEO of Arrow Greentech Limited (NSE:ARROWGREEN), 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 Arrow Greentech pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Arrow Greentech

How Does Total Compensation For Shilpan Patel Compare With Other Companies In The Industry?

Our data indicates that Arrow Greentech Limited has a market capitalization of ₹811m, and total annual CEO compensation was reported as ₹6.9m for the year to March 2020. We note that's a decrease of 8.9% compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹6.9m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹3.2m. This suggests that Shilpan Patel is paid more than the median for the industry. Moreover, Shilpan Patel also holds ₹448m worth of Arrow Greentech stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. At the company level, Arrow Greentech pays Shilpan Patel solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Arrow Greentech Limited's Growth Numbers

Over the last three years, Arrow Greentech Limited has shrunk its earnings per share by 59% per year. In the last year, its revenue is down 33%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Arrow Greentech Limited Been A Good Investment?

Since shareholders would have lost about 86% over three years, some Arrow Greentech Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Arrow Greentech pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, Arrow Greentech Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Arrow Greentech (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the 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.

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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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