How Is Jayaswal Neco Industries' (NSE:JAYNECOIND) CEO Paid Relative To Peers?

This article will reflect on the compensation paid to Arbind Jayaswal who has served as CEO of Jayaswal Neco Industries Limited (NSE:JAYNECOIND) since 2008. 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 Jayaswal Neco Industries

Comparing Jayaswal Neco Industries Limited's CEO Compensation With the industry

Our data indicates that Jayaswal Neco Industries Limited has a market capitalization of ₹2.4b, and total annual CEO compensation was reported as ₹15m for the year to March 2020. That's a notable increase of 19% on last year. In particular, the salary of ₹14.5m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹5.2m. Hence, we can conclude that Arbind Jayaswal is remunerated higher than the industry median. What's more, Arbind Jayaswal holds ₹9.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 96% of total compensation represents salary and 4.1% is other remuneration. Jayaswal Neco Industries is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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 Jayaswal Neco Industries Limited's Growth Numbers

Jayaswal Neco Industries Limited has reduced its earnings per share by 58% a year over the last three years. In the last year, its revenue is down 28%.

Overall this is not a very positive result for shareholders. 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 Jayaswal Neco Industries Limited Been A Good Investment?

Given the total shareholder loss of 57% over three years, many shareholders in Jayaswal Neco Industries Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Jayaswal Neco Industries pays its CEO a majority of compensation through a salary. As previously discussed, Arbind is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Jayaswal Neco Industries (1 doesn't sit too well with us!) that you should be aware of before investing here.

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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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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