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

Mandar Joshi has been the CEO of IVP Limited (NSE:IVP) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. 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 IVP

Comparing IVP Limited's CEO Compensation With the industry

According to our data, IVP Limited has a market capitalization of ₹692m, and paid its CEO total annual compensation worth ₹16m over the year to March 2020. That's a modest increase of 7.2% on the prior year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹16m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹6.8m. Hence, we can conclude that Mandar Joshi is remunerated higher than the industry median.

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. On a company level, IVP prefers to reward its CEO through a salary, opting not to pay Mandar Joshi through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at IVP Limited's Growth Numbers

Over the last three years, IVP Limited has shrunk its earnings per share by 114% per year. In the last year, its revenue is down 42%.

The decline in EPS is a bit concerning. 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. 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 IVP Limited Been A Good Investment?

With a three year total loss of 63% for the shareholders, IVP Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

IVP rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Mandar is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for IVP you should be aware of, and 2 of them make us uncomfortable.

Important note: IVP 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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