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Falgunbhai Patel has been the CEO of The Sandesh Limited (NSE:SANDESH) since 1978. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Falgunbhai Patel’s Compensation Compare With Similar Sized Companies?
Our data indicates that The Sandesh Limited is worth ₹5.2b, and total annual CEO compensation is ₹65m. (This number is for the twelve months until 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at ₹11m. We took a group of companies with market capitalizations below ₹14b, and calculated the median CEO compensation to be ₹1.5m.
It would therefore appear that The Sandesh Limited pays Falgunbhai Patel more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Sandesh has changed over time.
Is The Sandesh Limited Growing?
On average over the last three years, The Sandesh Limited has grown earnings per share (EPS) by 8.9% each year (using a line of best fit). It achieved revenue growth of 5.9% over the last year.
I would argue that the improvement in revenue isn’t particularly impressive, but the modest improvement in EPS is good. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has The Sandesh Limited Been A Good Investment?
Given the total loss of 6.3% over three years, many shareholders in The Sandesh Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at The Sandesh Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Sandesh.
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.