Dinesh Gautama has been the CEO of Navkar Corporation Limited (NSE:NAVKARCORP) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
How Does Dinesh Gautama's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Navkar Corporation Limited has a market cap of ₹5.5b, and reported total annual CEO compensation of ₹7.8m for the year to March 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth ₹7.8m. 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.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Navkar has changed from year to year.
Is Navkar Corporation Limited Growing?
On average over the last three years, Navkar Corporation Limited has shrunk earnings per share by 21% each year (measured with a line of best fit). Its revenue is up 12% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Navkar Corporation Limited Been A Good Investment?
Since shareholders would have lost about 82% over three years, some Navkar Corporation Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
Navkar Corporation Limited is currently paying its CEO below what is normal for companies of its size.
The compensation paid to Dinesh Gautama is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. Whatever your view on compensation, you might want to check if insiders are buying or selling Navkar shares (free trial).
Important note: Navkar 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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