How Does Deccan Cements' (NSE:DECCANCE) CEO Salary Compare to Peers?

Penmetcha Parvathi became the CEO of Deccan Cements Limited (NSE:DECCANCE) in 2003, 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 Deccan Cements

Comparing Deccan Cements Limited's CEO Compensation With the industry

At the time of writing, our data shows that Deccan Cements Limited has a market capitalization of ₹3.8b, and reported total annual CEO compensation of ₹24m for the year to March 2020. That's a notable decrease of 9.6% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹9.2m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹6.5m. Accordingly, our analysis reveals that Deccan Cements Limited pays Penmetcha Parvathi north of the industry median. Moreover, Penmetcha Parvathi also holds ₹16m worth of Deccan Cements 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, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. In Deccan Cements' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Deccan Cements Limited's Growth Numbers

Over the past three years, Deccan Cements Limited has seen its earnings per share (EPS) grow by 8.4% per year. In the last year, its revenue is down 24%.

We generally like to see a little revenue growth, but the modest EPSgrowth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Deccan Cements Limited Been A Good Investment?

With a three year total loss of 50% for the shareholders, Deccan Cements Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, Penmetcha is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. This doesn't look good when you see that Penmetcha is earning more than the industry median. All things considered, we believe shareholders would be disappointed to see Penmetcha's compensation grow without first seeing an improvement in the performance of the company.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Deccan Cements that investors should be aware of in a dynamic business environment.

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.

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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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