What Can We Learn About Hathway Cable and Datacom's (NSE:HATHWAY) CEO Compensation?

Rajan Gupta became the CEO of Hathway Cable and Datacom Limited (NSE:HATHWAY) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Hathway Cable and Datacom

Comparing Hathway Cable and Datacom Limited's CEO Compensation With the industry

At the time of writing, our data shows that Hathway Cable and Datacom Limited has a market capitalization of ₹54b, and reported total annual CEO compensation of ₹44m for the year to March 2020. That's a notable increase of 64% on last year. Notably, the salary which is ₹37.9m, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between ₹29b and ₹116b, we discovered that the median CEO total compensation of that group was ₹68m. That is to say, Rajan Gupta is paid under the industry median.

On an industry level, roughly 98% of total compensation represents salary and 2.3% is other remuneration. Hathway Cable and Datacom sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 Hathway Cable and Datacom Limited's Growth Numbers

Hathway Cable and Datacom Limited has seen its earnings per share (EPS) increase by 120% a year over the past three years. In the last year, its revenue is up 1.4%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Hathway Cable and Datacom Limited Been A Good Investment?

Given the total shareholder loss of 20% over three years, many shareholders in Hathway Cable and Datacom Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we touched on above, Hathway Cable and Datacom Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, the company has impressed with its EPS growth over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.

So you may want to check if insiders are buying Hathway Cable and Datacom shares with their own money (free access).

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

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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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