Here's What We Think About TCI Developers' (NSE:TCIDEVELOP) CEO Pay

The CEO of TCI Developers Limited (NSE:TCIDEVELOP) is Naresh Baranwal, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether TCI Developers pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for TCI Developers

How Does Total Compensation For Naresh Baranwal Compare With Other Companies In The Industry?

At the time of writing, our data shows that TCI Developers Limited has a market capitalization of ₹1.2b, and reported total annual CEO compensation of ₹3.8m for the year to March 2020. That's a modest increase of 6.1% on the prior year. Notably, the salary of ₹3.8m is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹2.3m. Accordingly, our analysis reveals that TCI Developers Limited pays Naresh Baranwal north of the industry median.

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, TCI Developers prefers to reward its CEO through a salary, opting not to pay Naresh Baranwal through 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.

TCI Developers Limited's Growth

TCI Developers Limited has reduced its earnings per share by 23% a year over the last three years. Its revenue is down 1.4% over the previous 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. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 TCI Developers Limited Been A Good Investment?

With a three year total loss of 43% for the shareholders, TCI Developers Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

TCI Developers rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Naresh is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for TCI Developers that investors should look into moving forward.

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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