How Is Peninsula Land's (NSE:PENINLAND) CEO Paid Relative To Peers?

This article will reflect on the compensation paid to Rajeev Piramal who has served as CEO of Peninsula Land Limited (NSE:PENINLAND) since 2012. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Peninsula Land

Comparing Peninsula Land Limited's CEO Compensation With the industry

Our data indicates that Peninsula Land Limited has a market capitalization of ₹1.6b, and total annual CEO compensation was reported as ₹12m for the year to March 2020. This means that the compensation hasn't changed much from 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 ₹2.3m. Hence, we can conclude that Rajeev Piramal is remunerated higher than the industry median. Moreover, Rajeev Piramal also holds ₹5.3m worth of Peninsula Land stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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. Peninsula Land has gone down a largely traditional route, paying Rajeev Piramal a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Peninsula Land Limited's Growth Numbers

Peninsula Land Limited has seen its earnings per share (EPS) increase by 20% a year over the past three years. It achieved revenue growth of 136% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Peninsula Land Limited Been A Good Investment?

With a three year total loss of 80% for the shareholders, Peninsula Land Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Peninsula Land pays its CEO a majority of compensation through a salary. As we touched on above, Peninsula Land Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, we must not forget that the EPS growth has been very strong, but shareholder returns — over the same period — have been disappointing. Considering overall performance, we can't say Rajeev is underpaid, in fact compensation is definitely on the higher side.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Peninsula Land (1 is potentially serious!) that you should be aware of before investing here.

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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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