Here's What We Learned About The CEO Pay At Fineotex Chemical Limited (NSE:FCL)

Surendrakumar Tibrewala became the CEO of Fineotex Chemical Limited (NSE:FCL) in 2007, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Fineotex Chemical.

View our latest analysis for Fineotex Chemical

Comparing Fineotex Chemical Limited's CEO Compensation With the industry

According to our data, Fineotex Chemical Limited has a market capitalization of ₹7.8b, and paid its CEO total annual compensation worth ₹8.3m over the year to March 2020. We note that's an increase of 8.4% above last year. Notably, the salary of ₹8.3m is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹6.5m. From this we gather that Surendrakumar Tibrewala is paid around the median for CEOs in the industry. Furthermore, Surendrakumar Tibrewala directly owns ₹4.4b worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. On a company level, Fineotex Chemical prefers to reward its CEO through a salary, opting not to pay Surendrakumar Tibrewala through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Fineotex Chemical Limited's Growth

Over the last three years, Fineotex Chemical Limited has not seen its earnings per share change much, though they have deteriorated slightly. It saw its revenue drop 7.8% over the last year.

A lack of EPS improvement is not good to see. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Fineotex Chemical Limited Been A Good Investment?

Since shareholders would have lost about 3.3% over three years, some Fineotex Chemical Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Fineotex Chemical pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Fineotex Chemical pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Fineotex Chemical 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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