How Much Did Nelco's (NSE:NELCO) CEO Pocket Last Year?

Pradip Nath became the CEO of Nelco Limited (NSE:NELCO) in 2011, 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 Nelco.

See our latest analysis for Nelco

Comparing Nelco Limited's CEO Compensation With the industry

According to our data, Nelco Limited has a market capitalization of ₹4.3b, and paid its CEO total annual compensation worth ₹27m over the year to March 2020. We note that's an increase of 17% above last year. In particular, the salary of ₹15.3m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹6.5m. This suggests that Pradip Nath is paid more than the median for the industry.

On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. Nelco pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Nelco Limited's Growth

Over the past three years, Nelco Limited has seen its earnings per share (EPS) grow by 16% per year. It achieved revenue growth of 11% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Nelco Limited Been A Good Investment?

Boasting a total shareholder return of 66% over three years, Nelco Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As previously discussed, Pradip is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Pradip's performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Nelco we think you should know about.

Switching gears from Nelco, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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