Rajeev Talwar became the CEO of DLF Limited (NSE:DLF) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for DLF.
How Does Total Compensation For Rajeev Talwar Compare With Other Companies In The Industry?
At the time of writing, our data shows that DLF Limited has a market capitalization of ₹382b, and reported total annual CEO compensation of ₹47m for the year to March 2020. That's a notable decrease of 44% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹20m.
On comparing similar companies from the same industry with market caps ranging from ₹294b to ₹881b, we found that the median CEO total compensation was ₹106m. That is to say, Rajeev Talwar is paid under the industry median. What's more, Rajeev Talwar holds ₹67m 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. DLF sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at DLF Limited's Growth Numbers
Over the last three years, DLF Limited has shrunk its earnings per share by 45% per year. Its revenue is down 35% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has DLF Limited Been A Good Investment?
With a three year total loss of 16% for the shareholders, DLF Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
As we noted earlier, DLF pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. It's tough to say that Rajeev is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for DLF that investors should look into moving forward.
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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