What Can We Make Of Prozone Intu Properties' (NSE:PROZONINTU) CEO Compensation?

Nikhil Chaturvedi became the CEO of Prozone Intu Properties Limited (NSE:PROZONINTU) in 2012, 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 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

Comparing Prozone Intu Properties Limited's CEO Compensation With the industry

At the time of writing, our data shows that Prozone Intu Properties Limited has a market capitalization of ₹2.8b, and reported total annual CEO compensation of ₹18m for the year to March 2020. That's a notable increase of 20% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹18m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹2.8m. Hence, we can conclude that Nikhil Chaturvedi is remunerated higher than the industry median. Furthermore, Nikhil Chaturvedi directly owns ₹259m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. 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 total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Prozone Intu Properties Limited's Growth

Over the last three years, Prozone Intu Properties Limited has shrunk its earnings per share by 40% per year. It saw its revenue drop 49% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Prozone Intu Properties Limited Been A Good Investment?

With a three year total loss of 75% for the shareholders, Prozone Intu Properties Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

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. Disappointingly, share price gains over the last three years have failed to materialize. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Prozone Intu Properties you should be aware of, and 1 of them is concerning.

Important note: Prozone Intu Properties is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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