How Much Is Nitiraj Engineers' (NSE:NITIRAJ) CEO Getting Paid?

Rajesh Bhatwal has been the CEO of Nitiraj Engineers Limited (NSE:NITIRAJ) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Nitiraj Engineers.

Check out our latest analysis for Nitiraj Engineers

Comparing Nitiraj Engineers Limited's CEO Compensation With the industry

According to our data, Nitiraj Engineers Limited has a market capitalization of ₹491m, and paid its CEO total annual compensation worth ₹4.3m over the year to March 2020. That is, the compensation was roughly the same as last year. In particular, the salary of ₹2.40m, 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 ₹2.6m. Hence, we can conclude that Rajesh Bhatwal is remunerated higher than the industry median. Moreover, Rajesh Bhatwal also holds ₹206m worth of Nitiraj Engineers stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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. Nitiraj Engineers sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Nitiraj Engineers Limited's Growth

Nitiraj Engineers Limited has reduced its earnings per share by 19% a year over the last three years. Its revenue is down 11% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Nitiraj Engineers Limited Been A Good Investment?

Given the total shareholder loss of 15% over three years, many shareholders in Nitiraj Engineers Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Rajesh 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. Arguably worse, we've been waiting for positive EPS growth for the last three years. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Nitiraj Engineers (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.

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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