How Is Arvind SmartSpaces' (NSE:ARVSMART) CEO Compensated?

Kamal Sham Singal has been the CEO of Arvind SmartSpaces Limited (NSE:ARVSMART) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Arvind SmartSpaces pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Arvind SmartSpaces

How Does Total Compensation For Kamal Sham Singal Compare With Other Companies In The Industry?

Our data indicates that Arvind SmartSpaces Limited has a market capitalization of ₹4.0b, and total annual CEO compensation was reported as ₹49m for the year to March 2020. We note that's an increase of 51% above last year. Notably, the salary which is ₹28.2m, 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 ₹2.4m. Accordingly, our analysis reveals that Arvind SmartSpaces Limited pays Kamal Sham Singal north of the industry median. Furthermore, Kamal Sham Singal directly owns ₹72m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. Arvind SmartSpaces pays a modest slice of remuneration through salary, as compared to the broader industry. 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.

A Look at Arvind SmartSpaces Limited's Growth Numbers

Over the last three years, Arvind SmartSpaces Limited has shrunk its earnings per share by 1.3% per year. In the last year, its revenue is up 3.6%.

A lack of EPS improvement is not good to see. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Arvind SmartSpaces Limited Been A Good Investment?

Given the total shareholder loss of 43% over three years, many shareholders in Arvind SmartSpaces Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Kamal Sham is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 1 which is concerning) in Arvind SmartSpaces we think you should know about.

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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