Key Things To Understand About Balaji Telefilms' (NSE:BALAJITELE) CEO Pay Cheque

This article will reflect on the compensation paid to Shobha Kapoor who has served as CEO of Balaji Telefilms Limited (NSE:BALAJITELE) since 2004. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Balaji Telefilms.

View our latest analysis for Balaji Telefilms

How Does Total Compensation For Shobha Kapoor Compare With Other Companies In The Industry?

Our data indicates that Balaji Telefilms Limited has a market capitalization of ₹6.2b, and total annual CEO compensation was reported as ₹24m for the year to March 2020. That is, the compensation was roughly the same as last year. Notably, the salary which is ₹22.3m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹1.8m. Hence, we can conclude that Shobha Kapoor is remunerated higher than the industry median. Furthermore, Shobha Kapoor directly owns ₹668m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. There isn't a significant difference between Balaji Telefilms and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Balaji Telefilms Limited's Growth

Over the last three years, Balaji Telefilms Limited has shrunk its earnings per share by 12% per year. Its revenue is down 12% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Balaji Telefilms Limited Been A Good Investment?

Since shareholders would have lost about 59% over three years, some Balaji Telefilms Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Shobha is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. To make matters worse, EPS growth has also been negative during this period. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

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. In our study, we found 3 warning signs for Balaji Telefilms you should be aware of, and 1 of them is concerning.

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.

If you’re looking to trade Balaji Telefilms, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.