What Can We Learn About Poddar Housing and Development's (NSE:PODDARHOUS) CEO Compensation?

Rohitashwa Poddar is the CEO of Poddar Housing and Development Limited (NSE:PODDARHOUS), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. 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 Poddar Housing and Development

Comparing Poddar Housing and Development Limited's CEO Compensation With the industry

According to our data, Poddar Housing and Development Limited has a market capitalization of ₹1.3b, and paid its CEO total annual compensation worth ₹3.7m over the year to March 2020. We note that's a small decrease of 5.5% on last year. Notably, the salary which is ₹3.00m, represents most of the total compensation being paid.

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 Rohitashwa Poddar is remunerated higher than the industry median. Moreover, Rohitashwa Poddar also holds ₹198m worth of Poddar Housing and Development 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. Poddar Housing and Development sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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.

Poddar Housing and Development Limited's Growth

Poddar Housing and Development Limited has reduced its earnings per share by 15% a year over the last three years. Revenue was pretty flat on last year.

Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Poddar Housing and Development Limited Been A Good Investment?

Given the total shareholder loss of 82% over three years, many shareholders in Poddar Housing and Development Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Rohitashwa 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. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for Poddar Housing and Development (2 are a bit concerning!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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