How Should Investors Feel About HT Media's (NSE:HTMEDIA) CEO Remuneration?

Praveen Someshwar has been the CEO of HT Media Limited (NSE:HTMEDIA) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether HT Media pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for HT Media

Comparing HT Media Limited's CEO Compensation With the industry

At the time of writing, our data shows that HT Media Limited has a market capitalization of ₹6.1b, and reported total annual CEO compensation of ₹38m for the year to March 2020. We note that's an increase of 59% above last year. In particular, the salary of ₹35.8m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹13m. Hence, we can conclude that Praveen Someshwar is remunerated higher than the industry median.

On an industry level, roughly 98% of total compensation represents salary and 2.3% is other remuneration. HT Media is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

HT Media Limited's Growth

HT Media Limited has reduced its earnings per share by 103% a year over the last three years. It saw its revenue drop 43% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has HT Media Limited Been A Good Investment?

Since shareholders would have lost about 71% over three years, some HT Media Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, HT Media Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for HT Media that investors should look into moving forward.

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.

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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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