Shalabh Mittal became the CEO of Mercator Limited (NSE:MERCATOR) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Shalabh Mittal’s Compensation Compare With Similar Sized Companies?
Our data indicates that Mercator Limited is worth ₹387m, and total annual CEO compensation is ₹13m. (This is based on the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at ₹7.3m. We took a group of companies with market capitalizations below ₹14b, and calculated the median CEO total compensation to be ₹1.5m.
As you can see, Shalabh Mittal is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Mercator Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Mercator, below.
Is Mercator Limited Growing?
Over the last three years, Mercator Limited has not seen its earnings per share change much, though there is a positive trend. In the last year, its revenue is down -11%.
I would prefer it if there was revenue growth, but the modest improvement in EPS is good. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.
Has Mercator Limited Been A Good Investment?
Given the total loss of 97% over three years, many shareholders in Mercator Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared total CEO remuneration at Mercator Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Mercator.
Important note: Mercator may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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