A Quick Analysis On UFO Moviez India's (NSE:UFO) CEO Salary

The CEO of UFO Moviez India Limited (NSE:UFO) is Rajesh Mishra, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for UFO Moviez India

Comparing UFO Moviez India Limited's CEO Compensation With the industry

Our data indicates that UFO Moviez India Limited has a market capitalization of ₹2.4b, and total annual CEO compensation was reported as ₹15m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at ₹11.7m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹1.6m. Accordingly, our analysis reveals that UFO Moviez India Limited pays Rajesh Mishra north of the industry median. What's more, Rajesh Mishra holds ₹2.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. UFO Moviez India sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

UFO Moviez India Limited's Growth

Over the last three years, UFO Moviez India Limited has shrunk its earnings per share by 66% per year. In the last year, its revenue is down 72%.

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. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 UFO Moviez India Limited Been A Good Investment?

Given the total shareholder loss of 75% over three years, many shareholders in UFO Moviez India Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, UFO Moviez India 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. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for UFO Moviez India (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Important note: UFO Moviez India is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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