What Can We Conclude About Ganesh Housing's (NSE:GANESHHOUC) CEO Pay?

This article will reflect on the compensation paid to Shekhar Patel who has served as CEO of Ganesh Housing Corporation Limited (NSE:GANESHHOUC) since 1994. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Ganesh Housing

How Does Total Compensation For Shekhar Patel Compare With Other Companies In The Industry?

According to our data, Ganesh Housing Corporation Limited has a market capitalization of ₹1.7b, and paid its CEO total annual compensation worth ₹12m over the year to March 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at ₹12.0m 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 ₹2.6m. Accordingly, our analysis reveals that Ganesh Housing Corporation Limited pays Shekhar Patel north of the industry median. What's more, Shekhar Patel holds ₹479m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Ganesh Housing pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Ganesh Housing Corporation Limited's Growth

Ganesh Housing Corporation Limited has reduced its earnings per share by 110% a year over the last three years. Its revenue is down 76% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Ganesh Housing Corporation Limited Been A Good Investment?

Since shareholders would have lost about 73% over three years, some Ganesh Housing Corporation Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Ganesh Housing pays its CEO a majority of compensation through a salary. As we noted earlier, Ganesh Housing pays its CEO higher than the norm for similar-sized companies belonging 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. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 2 which make us uncomfortable) in Ganesh Housing we think you should know about.

Switching gears from Ganesh Housing, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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