How Much Is Shankara Building Products' (NSE:SHANKARA) CEO Getting Paid?

Siddhartha Mundra has been the CEO of Shankara Building Products Limited (NSE:SHANKARA) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Shankara Building Products pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Shankara Building Products

How Does Total Compensation For Siddhartha Mundra Compare With Other Companies In The Industry?

Our data indicates that Shankara Building Products Limited has a market capitalization of ₹7.7b, and total annual CEO compensation was reported as ₹9.8m for the year to March 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at ₹8.95m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹8.3m. This suggests that Shankara Building Products remunerates its CEO largely in line with the industry average. Furthermore, Siddhartha Mundra directly owns ₹485k 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. There isn't a significant difference between Shankara Building Products and the broader market, in terms of salary allocation in the overall compensation package. 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.

A Look at Shankara Building Products Limited's Growth Numbers

Shankara Building Products Limited has reduced its earnings per share by 59% a year over the last three years. Its revenue is down 12% over the previous year.

The decline in EPS is a bit concerning. 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. 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 Shankara Building Products Limited Been A Good Investment?

Since shareholders would have lost about 83% over three years, some Shankara Building Products Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Shankara Building Products Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future 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. In our study, we found 4 warning signs for Shankara Building Products you should be aware of, and 1 of them is a bit unpleasant.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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