The CEO of Indian Terrain Fashions Limited (NSE:INDTERRAIN) is Charath Narsimhan. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Charath Narsimhan's Compensation Compare With Similar Sized Companies?
Our data indicates that Indian Terrain Fashions Limited is worth ₹2.7b, and total annual CEO compensation was reported as ₹6.9m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at ₹3.1m. We took a group of companies with market capitalizations below ₹14b, and calculated the median CEO total compensation to be ₹2.1m.
It would therefore appear that Indian Terrain Fashions Limited pays Charath Narsimhan 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. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Indian Terrain Fashions has changed from year to year.
Is Indian Terrain Fashions Limited Growing?
Over the last three years Indian Terrain Fashions Limited has shrunk its earnings per share by an average of 4.5% per year (measured with a line of best fit). In the last year, its revenue is up 6.1%.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Indian Terrain Fashions Limited Been A Good Investment?
Since shareholders would have lost about 52% over three years, some Indian Terrain Fashions Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared the total CEO remuneration paid by Indian Terrain Fashions 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.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Indian Terrain Fashions 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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