How Does Shemaroo Entertainment's (NSE:SHEMAROO) CEO Salary Compare to Peers?

Hiren Gada has been the CEO of Shemaroo Entertainment Limited (NSE:SHEMAROO) 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 Shemaroo Entertainment pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Shemaroo Entertainment

Comparing Shemaroo Entertainment Limited's CEO Compensation With the industry

Our data indicates that Shemaroo Entertainment Limited has a market capitalization of ₹2.0b, and total annual CEO compensation was reported as ₹5.3m for the year to March 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is ₹5.23m, 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. Hence, we can conclude that Hiren Gada is remunerated higher than the industry median. Furthermore, Hiren Gada directly owns ₹80m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Shemaroo Entertainment pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Shemaroo Entertainment Limited's Growth

Over the last three years, Shemaroo Entertainment Limited has shrunk its earnings per share by 40% per year. Its revenue is down 36% over the previous year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Shemaroo Entertainment Limited Been A Good Investment?

With a three year total loss of 85% for the shareholders, Shemaroo Entertainment Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Hiren receives almost all of their compensation through a salary. As we noted earlier, Shemaroo Entertainment pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which is potentially serious) in Shemaroo Entertainment 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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