Our View On Arvind SmartSpaces' (NSE:ARVSMART) CEO Pay

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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Arvind SmartSpaces.

See our latest analysis for Arvind SmartSpaces

Comparing Arvind SmartSpaces Limited's CEO Compensation With the industry

According to our data, Arvind SmartSpaces Limited has a market capitalization of ₹3.4b, and paid its CEO total annual compensation worth ₹49m over the year to March 2020. That's a notable increase of 51% on last year. We note that the salary portion, which stands at ₹28.2m 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 ₹2.4m. Accordingly, our analysis reveals that Arvind SmartSpaces Limited pays Kamal Sham Singal north of the industry median. Moreover, Kamal Sham Singal also holds ₹61m worth of Arvind SmartSpaces stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. It's interesting to note that Arvind SmartSpaces allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Arvind SmartSpaces Limited's Growth

Arvind SmartSpaces Limited has seen its earnings per share (EPS) increase by 2.2% a year over the past three years. Its revenue is up 1.0% over the last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 Arvind SmartSpaces Limited Been A Good Investment?

Since shareholders would have lost about 39% over three years, some Arvind SmartSpaces Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Arvind SmartSpaces pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for Arvind SmartSpaces, and although EPS growth is steady, it hasn't set the world on fire. And the situation doesn't look all that good when you see Kamal Sham is remunerated higher than the industry average. All things considered, we believe shareholders would be disappointed to see Kamal Sham's compensation grow without first seeing an improvement in the performance of the company.

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 3 warning signs (and 1 which is potentially serious) 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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