Why Albert David's (NSE:ALBERTDAVD) CEO Pay Matters

Tarminder Parmar has been the CEO of Albert David Limited (NSE:ALBERTDAVD) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Albert David.

See our latest analysis for Albert David

Comparing Albert David Limited's CEO Compensation With the industry

At the time of writing, our data shows that Albert David Limited has a market capitalization of ₹2.7b, and reported total annual CEO compensation of ₹22m for the year to March 2020. Notably, that's an increase of 15% over the year before. We note that the salary portion, which stands at ₹20.9m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹3.3m. Hence, we can conclude that Tarminder Parmar is remunerated higher than the industry median.

On an industry level, roughly 99% of total compensation represents salary and 1.2% is other remuneration. Albert David is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

Albert David Limited's Growth

Over the past three years, Albert David Limited has seen its earnings per share (EPS) grow by 88% per year. It saw its revenue drop 19% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Albert David Limited Been A Good Investment?

With a total shareholder return of 5.7% over three years, Albert David Limited has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we touched on above, Albert David 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. However, the EPS growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the high CEO pay, given the good EPS growth.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Albert David that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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