A Look At North Eastern Carrying's (NSE:NECCLTD) CEO Remuneration

Sunil Jain is the CEO of North Eastern Carrying Corporation Limited (NSE:NECCLTD), and in this article, we analyze the executive's compensation package 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 North Eastern Carrying.

View our latest analysis for North Eastern Carrying

Comparing North Eastern Carrying Corporation Limited's CEO Compensation With the industry

At the time of writing, our data shows that North Eastern Carrying Corporation Limited has a market capitalization of ₹457m, and reported total annual CEO compensation of ₹4.8m for the year to March 2020. That is, the compensation was roughly the same as last year. Notably, the salary of ₹4.8m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹2.7m. Hence, we can conclude that Sunil Jain is remunerated higher than the industry median.

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. At the company level, North Eastern Carrying pays Sunil Jain solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at North Eastern Carrying Corporation Limited's Growth Numbers

North Eastern Carrying Corporation Limited has reduced its earnings per share by 35% a year over the last three years. In the last year, its revenue is down 27%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has North Eastern Carrying Corporation Limited Been A Good Investment?

Since shareholders would have lost about 69% over three years, some North Eastern Carrying Corporation Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

North Eastern Carrying pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Sunil 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.

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 5 warning signs (and 3 which are a bit concerning) in North Eastern Carrying we think you should know about.

Important note: North Eastern Carrying is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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