How Does Prozone Intu Properties' (NSE:PROZONINTU) CEO Salary Compare to Peers?

This article will reflect on the compensation paid to Nikhil Chaturvedi who has served as CEO of Prozone Intu Properties Limited (NSE:PROZONINTU) since 2012. This analysis will also assess whether Prozone Intu Properties pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Prozone Intu Properties

How Does Total Compensation For Nikhil Chaturvedi Compare With Other Companies In The Industry?

Our data indicates that Prozone Intu Properties Limited has a market capitalization of ₹3.1b, and total annual CEO compensation was reported as ₹18m for the year to March 2020. We note that's an increase of 20% above last year. Notably, the salary of ₹18m is the entirety of the CEO compensation.

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 Nikhil Chaturvedi is remunerated higher than the industry median. Moreover, Nikhil Chaturvedi also holds ₹281m worth of Prozone Intu Properties 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. On a company level, Prozone Intu Properties prefers to reward its CEO through a salary, opting not to pay Nikhil Chaturvedi through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Prozone Intu Properties Limited's Growth Numbers

Over the last three years, Prozone Intu Properties Limited has shrunk its earnings per share by 92% per year. It saw its revenue drop 62% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Prozone Intu Properties Limited Been A Good Investment?

Since shareholders would have lost about 65% over three years, some Prozone Intu Properties Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Prozone Intu Properties pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Prozone Intu Properties 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. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Prozone Intu Properties (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

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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