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

Shekhar Patel became the CEO of Ganesh Housing Corporation Limited (NSE:GANESHHOUC) in 1994, 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 Ganesh Housing.

See 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 ₹1.4b, 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.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹2.4m. Accordingly, our analysis reveals that Ganesh Housing Corporation Limited pays Shekhar Patel north of the industry median. Furthermore, Shekhar Patel directly owns ₹398m 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. Ganesh Housing is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. 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.

Ganesh Housing Corporation Limited's Growth

Over the last three years, Ganesh Housing Corporation Limited has shrunk its earnings per share by 108% per year. Its revenue is down 54% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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?

Given the total shareholder loss of 78% over three years, many shareholders in Ganesh Housing Corporation Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shekhar receives almost all of their compensation through a salary. As previously discussed, Shekhar is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Ganesh Housing (1 can't be ignored!) that you should be aware of before investing here.

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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