How Much Is Deccan Cements Limited (NSE:DECCANCE) CEO Getting Paid?

This article will reflect on the compensation paid to Penmetcha Parvathi who has served as CEO of Deccan Cements Limited (NSE:DECCANCE) since 2003. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Deccan Cements

How Does Total Compensation For Penmetcha Parvathi Compare With Other Companies In The Industry?

Our data indicates that Deccan Cements Limited has a market capitalization of ₹5.1b, and total annual CEO compensation was reported as ₹24m for the year to March 2020. We note that's a decrease of 9.6% compared to 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 ₹2.7m. Hence, we can conclude that Penmetcha Parvathi is remunerated higher than the industry median. Moreover, Penmetcha Parvathi also holds ₹22m 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 90% of total compensation represents salary, while the remainder of 10% is other remuneration. It's interesting to note that Deccan Cements allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Deccan Cements Limited's Growth

Over the past three years, Deccan Cements Limited has seen its earnings per share (EPS) grow by 13% per year. It saw its revenue drop 10% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Deccan Cements Limited Been A Good Investment?

Given the total shareholder loss of 37% over three years, many shareholders in Deccan Cements Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Deccan Cements pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed with its EPS growth, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Penmetcha is earning a very handsome sum.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for Deccan Cements that investors should look into moving forward.

Important note: Deccan Cements 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.

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