Here's Why Shareholders May Want To Be Cautious With Increasing Creative Eye Limited's (NSE:CREATIVEYE) CEO Pay Packet

Performance at Creative Eye Limited (NSE:CREATIVEYE) has been reasonably good and CEO Dheeraj Kochhar has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 30 September 2022. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Creative Eye

Comparing Creative Eye Limited's CEO Compensation With The Industry

Our data indicates that Creative Eye Limited has a market capitalization of ₹92m, and total annual CEO compensation was reported as ₹4.5m for the year to March 2022. There was no change in the compensation compared to last year. In particular, the salary of ₹4.23m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under ₹16b, the reported median total CEO compensation was ₹1.1m. This suggests that Dheeraj Kochhar is paid more than the median for the industry. Furthermore, Dheeraj Kochhar directly owns ₹18m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	₹4.2m	₹4.2m	95%
Other	₹234k	₹234k	5%
Total Compensation	₹4.5m	₹4.5m	100%

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.1385% of the pie. There isn't a significant difference between Creative Eye 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 Creative Eye Limited's Growth Numbers

Over the past three years, Creative Eye Limited has seen its earnings per share (EPS) grow by 48% per year. Its revenue is down 72% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Creative Eye Limited Been A Good Investment?

We think that the total shareholder return of 229%, over three years, would leave most Creative Eye Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Creative Eye that investors should look into moving forward.

Important note: Creative Eye is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.