What Does Visaka Industries' (NSE:VISAKAIND) CEO Pay Reveal?

G. Vivekanand has been the CEO of Visaka Industries Limited (NSE:VISAKAIND) since 2009, and this article will examine the executive's compensation with respect to the overall performance of the company. 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 Visaka Industries

How Does Total Compensation For G. Vivekanand Compare With Other Companies In The Industry?

According to our data, Visaka Industries Limited has a market capitalization of ₹5.0b, and paid its CEO total annual compensation worth ₹27m over the year to March 2020. That's a notable decrease of 51% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹12m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.5m. Accordingly, our analysis reveals that Visaka Industries Limited pays G. Vivekanand north of the industry median. What's more, G. Vivekanand holds ₹60m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 10% of the pie. In Visaka Industries' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Visaka Industries Limited's Growth

Visaka Industries Limited has seen its earnings per share (EPS) increase by 8.8% a year over the past three years. In the last year, its revenue is down 15%.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Visaka Industries Limited Been A Good Investment?

Since shareholders would have lost about 41% over three years, some Visaka Industries Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Visaka Industries 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. The growth in the business has been uninspiring, but the shareholder returns for Visaka Industries have arguably been worse, over the last three years. And the situation doesn't look all that good when you see G. is remunerated higher than the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 4 warning signs for Visaka Industries that investors should think about before committing capital to this stock.

Switching gears from Visaka Industries, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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