Does Advani Hotels & Resorts (India) Limited's (NSE:ADVANIHOTR) CEO Pay Reflect Performance?
Sunder Advani has been the CEO of Advani Hotels & Resorts (India) Limited (NSE:ADVANIHOTR) since 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Advani Hotels & Resorts (India)
How Does Sunder Advani's Compensation Compare With Similar Sized Companies?
According to our data, Advani Hotels & Resorts (India) Limited has a market capitalization of ₹2.6b, and pays its CEO total annual compensation worth ₹11m. (This figure is for the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹10m. We took a group of companies with market capitalizations below ₹14b, and calculated the median CEO total compensation to be ₹1.4m.
Thus we can conclude that Sunder Advani receives more in total compensation than the median of a group of companies in the same market, and of similar size to Advani Hotels & Resorts (India) Limited. However, this doesn't necessarily mean the pay is too high. 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, below, how CEO compensation at Advani Hotels & Resorts (India) has changed over time.
Is Advani Hotels & Resorts (India) Limited Growing?
Over the last three years Advani Hotels & Resorts (India) Limited has grown its earnings per share (EPS) by an average of 13% per year (using a line of best fit). Its revenue is up 12% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Advani Hotels & Resorts (India) Limited Been A Good Investment?
Advani Hotels & Resorts (India) Limited has generated a total shareholder return of 9.5% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We examined the amount Advani Hotels & Resorts (India) Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. So you may want to check if insiders are buying Advani Hotels & Resorts (India) shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
