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Is Atlanta Limited's (NSE:ATLANTA) CEO Being Overpaid?

Simply Wall St

Rikiin Bbarot has been the CEO of Atlanta Limited (NSE:ATLANTA) since 2016. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

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How Does Rikiin Bbarot's Compensation Compare With Similar Sized Companies?

According to our data, Atlanta Limited has a market capitalization of ₹1.2b, and pays its CEO total annual compensation worth ₹9.0m. (This is based on the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at ₹3.0m. We looked at a group of companies with market capitalizations under ₹14b, and the median CEO total compensation was ₹1.3m.

Thus we can conclude that Rikiin Bbarot receives more in total compensation than the median of a group of companies in the same market, and of similar size to Atlanta Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Atlanta has changed over time.

NSEI:ATLANTA CEO Compensation, May 23rd 2019

Is Atlanta Limited Growing?

Over the last three years Atlanta Limited has shrunk its earnings per share by an average of 44% per year (measured with a line of best fit). Its revenue is down -53% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Atlanta Limited Been A Good Investment?

With a three year total loss of 62%, Atlanta Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We examined the amount Atlanta Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark 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. Some might well form the view that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Atlanta.

Important note: Atlanta 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.

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.