This Is Why Shareholders May Want To Hold Back On A Pay Rise For D. B. Corp Limited's (NSE:DBCORP) CEO

The disappointing performance at D. B. Corp Limited (NSE:DBCORP) will make some shareholders rather disheartened. At the upcoming AGM on 30 September 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for D. B

Comparing D. B. Corp Limited's CEO Compensation With the industry

At the time of writing, our data shows that D. B. Corp Limited has a market capitalization of ₹17b, and reported total annual CEO compensation of ₹14m for the year to March 2021. That's a notable decrease of 9.8% on last year. Notably, the salary of ₹14m is the entirety of the CEO compensation.

On comparing similar companies from the same industry with market caps ranging from ₹7.4b to ₹30b, we found that the median CEO total compensation was ₹25m. That is to say, Sudhir Agarwal is paid under the industry median. What's more, Sudhir Agarwal holds ₹779m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹14m	₹15m	100%
Other	-	-	-
Total Compensation	₹14m	₹15m	100%

On an industry level, roughly 98% of total compensation represents salary and 2% is other remuneration. On a company level, D. B prefers to reward its CEO through a salary, opting not to pay Sudhir Agarwal through non-salary benefits. 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.

D. B. Corp Limited's Growth

Over the last three years, D. B. Corp Limited has shrunk its earnings per share by 17% per year. It saw its revenue drop 12% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has D. B. Corp Limited Been A Good Investment?

With a total shareholder return of -44% over three years, D. B. Corp Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

D. B rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for D. B that you should be aware of before investing.

Important note: D. B 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.
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