Does Tainwala Chemicals and Plastics (India)'s (NSE:TAINWALCHM) CEO Salary Compare Well With Industry Peers?

The CEO of Tainwala Chemicals and Plastics (India) Limited (NSE:TAINWALCHM) is Rakesh Tainwala, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Tainwala Chemicals and Plastics (India) pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Tainwala Chemicals and Plastics (India)

Comparing Tainwala Chemicals and Plastics (India) Limited's CEO Compensation With the industry

Our data indicates that Tainwala Chemicals and Plastics (India) Limited has a market capitalization of ₹761m, and total annual CEO compensation was reported as ₹7.4m for the year to March 2020. That's a notable increase of 14% on last year. Notably, the salary which is ₹6.00m, 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 ₹6.5m. This suggests that Tainwala Chemicals and Plastics (India) remunerates its CEO largely in line with the industry average.

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Tainwala Chemicals and Plastics (India) is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Tainwala Chemicals and Plastics (India) Limited's Growth Numbers

Tainwala Chemicals and Plastics (India) Limited has reduced its earnings per share by 19% a year over the last three years. Its revenue is down 40% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Tainwala Chemicals and Plastics (India) Limited Been A Good Investment?

With a three year total loss of 26% for the shareholders, Tainwala Chemicals and Plastics (India) Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Tainwala Chemicals and Plastics (India) pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

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 3 warning signs for Tainwala Chemicals and Plastics (India) (1 shouldn't be ignored!) that you should be aware of before investing here.

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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