What Can We Learn About India Cements' (NSE:INDIACEM) CEO Compensation?

The CEO of The India Cements Limited (NSE:INDIACEM) is Narayanaswamy Srinivasan, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether India Cements pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for India Cements

How Does Total Compensation For Narayanaswamy Srinivasan Compare With Other Companies In The Industry?

Our data indicates that The India Cements Limited has a market capitalization of ₹52b, and total annual CEO compensation was reported as ₹34m for the year to March 2020. That's a notable decrease of 9.1% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹11m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹29b and ₹117b had a median total CEO compensation of ₹17m. Hence, we can conclude that Narayanaswamy Srinivasan is remunerated higher than the industry median.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. India Cements pays a modest slice of remuneration through salary, as compared 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 The India Cements Limited's Growth Numbers

The India Cements Limited's earnings per share (EPS) grew 30% per year over the last three years. Its revenue is down 25% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has The India Cements Limited Been A Good Investment?

The India Cements Limited has generated a total shareholder return of 11% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we noted earlier, India Cements pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed us with its EPS growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for India Cements (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Important note: India 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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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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