Saagar Govil became the CEO of Cemtrex Inc (NASDAQ:CETX) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does Saagar Govil’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Cemtrex Inc has a market cap of US$15m, and is paying total annual CEO compensation of US$1m. That’s a notable increase of 124% on last year. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$297k.
It would therefore appear that Cemtrex Inc pays Saagar Govil more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration 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.
The graphic below shows how CEO compensation at Cemtrex has changed from year to year.
Is Cemtrex Inc Growing?
Cemtrex Inc has reduced its earnings per share by an average of 30% a year, over the last three years. Its revenue is down -16% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Cemtrex Inc Been A Good Investment?
Since shareholders would have lost about 56% over three years, some Cemtrex Inc shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We examined the amount Cemtrex Inc 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.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Over the same period, investors would have come away with nothing in the way of share price gains. Notably, the CEO remuneration is actually up on last year. 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 Cemtrex Inc.
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.