Does Manaksia Aluminium's (NSE:MANAKALUCO) CEO Salary Compare Well With Industry Peers?

Sunil Agrawal became the CEO of Manaksia Aluminium Company Limited (NSE:MANAKALUCO) in 2014, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Manaksia Aluminium

How Does Total Compensation For Sunil Agrawal Compare With Other Companies In The Industry?

According to our data, Manaksia Aluminium Company Limited has a market capitalization of ₹563m, and paid its CEO total annual compensation worth ₹13m over the year to March 2020. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹13m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹4.0m. This suggests that Sunil Agrawal is paid more than the median for the industry. Furthermore, Sunil Agrawal directly owns ₹51m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 100% of total compensation represents salary, while the remainder of 0.4% is other remuneration. On a company level, Manaksia Aluminium prefers to reward its CEO through a salary, opting not to pay Sunil Agrawal through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Manaksia Aluminium Company Limited's Growth

Manaksia Aluminium Company Limited has seen its earnings per share (EPS) increase by 29% a year over the past three years. Its revenue is down 15% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Manaksia Aluminium Company Limited Been A Good Investment?

Given the total shareholder loss of 1.1% over three years, many shareholders in Manaksia Aluminium Company 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...

Manaksia Aluminium pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Sunil is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, we must not forget that the EPS growth has been very strong, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for Manaksia Aluminium (1 is potentially serious!) that you should be aware of before investing here.

Important note: Manaksia 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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