What Can We Make Of PC Jeweller's (NSE:PCJEWELLER) CEO Compensation?

Balram Garg became the CEO of PC Jeweller Limited (NSE:PCJEWELLER) in 2005, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for PC Jeweller.

Check out our latest analysis for PC Jeweller

How Does Total Compensation For Balram Garg Compare With Other Companies In The Industry?

At the time of writing, our data shows that PC Jeweller Limited has a market capitalization of ₹14b, and reported total annual CEO compensation of ₹24m for the year to March 2020. Notably, that's an increase of 55% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹24m.

In comparison with other companies in the industry with market capitalizations ranging from ₹7.3b to ₹29b, the reported median CEO total compensation was ₹24m. So it looks like PC Jeweller compensates Balram Garg in line with the median for the industry. What's more, Balram Garg holds ₹6.3b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

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. Speaking on a company level, PC Jeweller prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

PC Jeweller Limited's Growth

Over the last three years, PC Jeweller Limited has shrunk its earnings per share by 111% per year. It saw its revenue drop 56% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 PC Jeweller Limited Been A Good Investment?

With a three year total loss of 92% for the shareholders, PC Jeweller Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

PC Jeweller pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Balram is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for PC Jeweller (of which 2 make us 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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