What Can We Conclude About Maan Aluminium's (NSE:MAANALU) CEO Pay?

Sandeep Verma became the CEO of Maan Aluminium Limited (NSE:MAANALU) in 2015, 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 assess whether Maan Aluminium pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Maan Aluminium

Comparing Maan Aluminium Limited's CEO Compensation With the industry

At the time of writing, our data shows that Maan Aluminium Limited has a market capitalization of ₹731m, and reported total annual CEO compensation of ₹4.4m for the year to March 2020. That's a notable increase of 9.3% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹4.4m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹4.1m. So it looks like Maan Aluminium compensates Sandeep Verma in line with the median for the industry.

On an industry level, around 99% of total compensation represents salary and 1.1% is other remuneration. At the company level, Maan Aluminium pays Sandeep Verma solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Maan Aluminium Limited's Growth Numbers

Over the past three years, Maan Aluminium Limited has seen its earnings per share (EPS) grow by 7.7% per year. Its revenue is down 44% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Maan Aluminium Limited Been A Good Investment?

Given the total shareholder loss of 28% over three years, many shareholders in Maan Aluminium Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Maan Aluminium pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Sandeep is compensated close to the median for companies of its size, and which belong to the same industry. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Sandeep deserves a raise.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 4 warning signs for Maan Aluminium that investors should look into moving forward.

Important note: Maan Aluminium 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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