How Does Shree Rama Multi-Tech's (NSE:SHREERAMA) CEO Pay Compare With Company Performance?

Shailesh Desai became the CEO of Shree Rama Multi-Tech Limited (NSE:SHREERAMA) 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 Shree Rama Multi-Tech pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Shree Rama Multi-Tech

How Does Total Compensation For Shailesh Desai Compare With Other Companies In The Industry?

According to our data, Shree Rama Multi-Tech Limited has a market capitalization of ₹531m, and paid its CEO total annual compensation worth ₹7.0m over the year to March 2020. That's just a smallish increase of 5.4% on last year. Notably, the salary which is ₹6.76m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.2m. Accordingly, our analysis reveals that Shree Rama Multi-Tech Limited pays Shailesh Desai north of the industry median.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Shree Rama Multi-Tech 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.

Shree Rama Multi-Tech Limited's Growth

Shree Rama Multi-Tech Limited's earnings per share (EPS) grew 105% per year over the last three years. In the last year, its revenue is down 10%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Shree Rama Multi-Tech Limited Been A Good Investment?

Given the total shareholder loss of 53% over three years, many shareholders in Shree Rama Multi-Tech Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shailesh receives almost all of their compensation through a salary. As previously discussed, Shailesh is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the company has impressed with its EPS growth, but it's disappointing to see negative shareholder returns over the same period. Considering overall performance, we can't say Shailesh is underpaid, in fact compensation is definitely on the higher side.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Shree Rama Multi-Tech (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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