We Discuss Why Raj Television Network Limited's (NSE:RAJTV) CEO Compensation May Be Closely Reviewed

Shareholders will probably not be too impressed with the underwhelming results at Raj Television Network Limited (NSE:RAJTV) recently. At the upcoming AGM on 30 September 2022, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Raj Television Network

Comparing Raj Television Network Limited's CEO Compensation With The Industry

Our data indicates that Raj Television Network Limited has a market capitalization of ₹2.1b, and total annual CEO compensation was reported as ₹12m for the year to March 2022. This was the same as last year. Notably, the salary of ₹12m is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below ₹16b, reported a median total CEO compensation of ₹10m. This suggests that Raj Television Network remunerates its CEO largely in line with the industry average. What's more, Mani Raajhendhran holds ₹242m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	₹12m	₹12m	100%
Other	-	-	-
Total Compensation	₹12m	₹12m	100%

On an industry level, roughly 100% of total compensation represents salary and 0.2491% is other remuneration. At the company level, Raj Television Network pays Mani Raajhendhran solely through a salary, preferring to go down a conventional route. 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 Raj Television Network Limited's Growth Numbers

Raj Television Network Limited has reduced its earnings per share by 28% a year over the last three years. In the last year, its revenue is down 16%.

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. 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 Raj Television Network Limited Been A Good Investment?

Given the total shareholder loss of 1.8% over three years, many shareholders in Raj Television Network Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Raj Television Network pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Raj Television Network you should be aware of, and 1 of them is a bit concerning.

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. 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.