Baldevraj R. Taneja became the CEO of ISMT Limited (NSE:ISMTLTD) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for ISMT
How Does Baldevraj R. Taneja's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that ISMT Limited has a market cap of ₹1.1b, and is paying total annual CEO compensation of ₹18m. (This figure is for the year to March 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth ₹18m. We examined a group of similar sized companies, with market capitalizations of below ₹14b. The median CEO compensation in that group is ₹1.3m.
It would therefore appear that ISMT Limited pays Baldevraj R. Taneja more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at ISMT, below.
Is ISMT Limited Growing?
On average over the last three years, ISMT Limited has shrunk earnings per share by 1.9% each year (measured with a line of best fit). In the last year, its revenue is up 30%.
The reduction in earnings per share, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has ISMT Limited Been A Good Investment?
Given the total loss of 0.7% over three years, many shareholders in ISMT 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...
We compared total CEO remuneration at ISMT Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at ISMT.
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