How Much Did Maithan Alloys' (NSE:MAITHANALL) CEO Pocket Last Year?

This article will reflect on the compensation paid to Subodh Agarwalla who has served as CEO of Maithan Alloys Limited (NSE:MAITHANALL) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Maithan Alloys

Comparing Maithan Alloys Limited's CEO Compensation With the industry

Our data indicates that Maithan Alloys Limited has a market capitalization of ₹18b, and total annual CEO compensation was reported as ₹68m for the year to March 2020. That's a notable decrease of 10% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹7.0m.

In comparison with other companies in the industry with market capitalizations ranging from ₹7.2b to ₹29b, the reported median CEO total compensation was ₹30m. Hence, we can conclude that Subodh Agarwalla is remunerated higher than the industry median. What's more, Subodh Agarwalla holds ₹250m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 99% of total compensation represents salary, while the remainder of 1.1% is other remuneration. Maithan Alloys sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Maithan Alloys Limited's Growth

Over the last three years, Maithan Alloys Limited has shrunk its earnings per share by 10% per year. Its revenue is down 23% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Maithan Alloys Limited Been A Good Investment?

Since shareholders would have lost about 32% over three years, some Maithan Alloys Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Maithan Alloys Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Maithan Alloys that you should be aware of before investing.

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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