Is Eros International Media Limited’s (NSE:EROSMEDIA) CEO Paid Enough Relative To Peers?

Sunil Lulla has been the CEO of Eros International Media Limited (NSE:EROSMEDIA) since 2009. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Eros International Media

How Does Sunil Lulla’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Eros International Media Limited has a market cap of ₹1.4b, and reported total annual CEO compensation of ₹48m for the year to March 2019. It is worth noting that the CEO compensation consists almost entirely of the salary, worth ₹47m. We examined a group of similar sized companies, with market capitalizations of below ₹14b. The median CEO total compensation in that group is ₹2.4m.

Thus we can conclude that Sunil Lulla receives more in total compensation than the median of a group of companies in the same market, and of similar size to Eros International Media Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. Although we don’t have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

The graphic below shows how CEO compensation at Eros International Media has changed from year to year.

NSEI:EROSMEDIA CEO Compensation, December 5th 2019
NSEI:EROSMEDIA CEO Compensation, December 5th 2019

Is Eros International Media Limited Growing?

Over the last three years, Eros International Media Limited has not seen its earnings per share change much, though they have deteriorated slightly, according to a line of best fit. It saw its revenue drop 2.4% over the last year.

The lack of earnings per share growth in the last three years is unimpressive. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

Has Eros International Media Limited Been A Good Investment?

Given the total loss of 92% over three years, many shareholders in Eros International Media Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We examined the amount Eros International Media Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years. Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! So you may want to check if insiders are buying Eros International Media shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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