Is HSIL Limited (NSE:HSIL) Excessively Paying Its CEO?
Rajendra Somany became the CEO of HSIL Limited (NSE:HSIL) in 2006. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
See our latest analysis for HSIL
How Does Rajendra Somany's Compensation Compare With Similar Sized Companies?
Our data indicates that HSIL Limited is worth ₹3.3b, and total annual CEO compensation was reported as ₹53m for the year to March 2019. That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at ₹31m. We examined a group of similar sized companies, with market capitalizations of below ₹14b. The median CEO total compensation in that group is ₹2.4m.
Thus we can conclude that Rajendra Somany receives more in total compensation than the median of a group of companies in the same market, and of similar size to HSIL Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at HSIL, below.
Is HSIL Limited Growing?
HSIL Limited has reduced its earnings per share by an average of 16% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 20%.
Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has HSIL Limited Been A Good Investment?
Given the total loss of 86% over three years, many shareholders in HSIL Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared the total CEO remuneration paid by HSIL Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling HSIL shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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.
