The share price of Snowman Logistics Limited (NSE:SNOWMAN) has struggled to grow by much over the last few years and probably has to do with the fact that earnings growth has gone backwards. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 03 September 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
Comparing Snowman Logistics Limited's CEO Compensation With the industry
Our data indicates that Snowman Logistics Limited has a market capitalization of ₹7.1b, and total annual CEO compensation was reported as ₹12m for the year to March 2021. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at ₹11.9m constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹9.7m. From this we gather that Sunil Nair is paid around the median for CEOs in the industry.
On an industry level, around 96% of total compensation represents salary and 4% is other remuneration. Snowman Logistics has gone down a largely traditional route, paying Sunil Nair a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Snowman Logistics Limited's Growth
Over the last three years, Snowman Logistics Limited has shrunk its earnings per share by 55% per year. In the last year, its revenue is up 6.3%.
Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Snowman Logistics Limited Been A Good Investment?
Snowman Logistics Limited has generated a total shareholder return of 4.0% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
Snowman Logistics pays its CEO a majority of compensation through a salary. While it's true that the share price growth hasn't been bad, it's hard to overlook the lack of earnings growth and this makes us question whether there will be any strong catalyst for the stock to improve. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.
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. We identified 4 warning signs for Snowman Logistics (2 are potentially serious!) that you should be aware of before investing here.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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