What Can We Learn About Mukta Arts' (NSE:MUKTAARTS) CEO Compensation?

Rahul Puri has been the CEO of Mukta Arts Limited (NSE:MUKTAARTS) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Mukta Arts

Comparing Mukta Arts Limited's CEO Compensation With the industry

According to our data, Mukta Arts Limited has a market capitalization of ₹737m, and paid its CEO total annual compensation worth ₹5.2m over the year to March 2020. That's a modest increase of 7.9% on the prior year. Notably, the salary which is ₹5.13m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹1.8m. This suggests that Rahul Puri is paid more than the median for the industry.

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. Mukta Arts is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Mukta Arts Limited's Growth Numbers

Mukta Arts Limited has reduced its earnings per share by 91% a year over the last three years. In the last year, its revenue is down 33%.

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. 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 Mukta Arts Limited Been A Good Investment?

Given the total shareholder loss of 66% over three years, many shareholders in Mukta Arts 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...

Mukta Arts pays its CEO a majority of compensation through a salary. As we noted earlier, Mukta Arts pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which is a bit unpleasant) in Mukta Arts we think you should know about.

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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