How Is NOCIL's (NSE:NOCIL) CEO Compensated?

Sudhir Deo has been the CEO of NOCIL Limited (NSE:NOCIL) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for NOCIL.

See our latest analysis for NOCIL

How Does Total Compensation For Sudhir Deo Compare With Other Companies In The Industry?

At the time of writing, our data shows that NOCIL Limited has a market capitalization of ₹28b, and reported total annual CEO compensation of ₹31m for the year to March 2020. Notably, that's a decrease of 9.9% over the year before. We note that the salary portion, which stands at ₹27.2m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from ₹15b to ₹59b, we found that the median CEO total compensation was ₹17m. This suggests that Sudhir Deo is paid more than the median for the industry. Moreover, Sudhir Deo also holds ₹145m worth of NOCIL stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. There isn't a significant difference between NOCIL and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at NOCIL Limited's Growth Numbers

NOCIL Limited has reduced its earnings per share by 25% a year over the last three years. It saw its revenue drop 6.8% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has NOCIL Limited Been A Good Investment?

Since shareholders would have lost about 4.4% over three years, some NOCIL Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, NOCIL pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. 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 3 warning signs for NOCIL that investors should think about before committing capital to this stock.

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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