Should You Worry About Nectar Lifesciences Limited's (NSE:NECLIFE) CEO Salary Level?

In 2013 Dinesh Dua was appointed CEO of Nectar Lifesciences Limited (NSE:NECLIFE). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Nectar Lifesciences

How Does Dinesh Dua's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Nectar Lifesciences Limited has a market cap of ₹2.8b, and reported total annual CEO compensation of ₹12m for the year to March 2019. Notably, the salary of ₹12m is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below ₹14b. The median CEO total compensation in that group is ₹3.6m.

It would therefore appear that Nectar Lifesciences Limited pays Dinesh Dua 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 better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Nectar Lifesciences has changed over time.

Is Nectar Lifesciences Limited Growing?

On average over the last three years, Nectar Lifesciences Limited has shrunk earnings per share by 9.3% each year (measured with a line of best fit). It achieved revenue growth of 1.5% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Nectar Lifesciences Limited Been A Good Investment?

Since shareholders would have lost about 66% over three years, some Nectar Lifesciences Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Nectar Lifesciences 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.

We think many shareholders would be underwhelmed with the business growth over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Nectar Lifesciences shares (free trial).

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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