Yahoo Finance Is Dewan Housing Finance Corporation Limited (NSE:DHFL) Excessively Paying Its CEO?
In 2015 Harshil Mehta was appointed CEO of Dewan Housing Finance Corporation Limited (NSE:DHFL). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Dewan Housing Finance
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How Does Harshil Mehta’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Dewan Housing Finance Corporation Limited has a market cap of ₹66b, and is paying total annual CEO compensation of ₹52m. (This is based on the year to 2018). While we always look at total compensation first, we note that the salary component is less, at ₹37m. We looked at a group of companies with market capitalizations from ₹28b to ₹114b, and the median CEO compensation was ₹25m.
It would therefore appear that Dewan Housing Finance Corporation Limited pays Harshil Mehta 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.
You can see, below, how CEO compensation at Dewan Housing Finance has changed over time.
Is Dewan Housing Finance Corporation Limited Growing?
Over the last three years Dewan Housing Finance Corporation Limited has grown its earnings per share (EPS) by an average of 35% per year (using a line of best fit). In the last year, its revenue is down -1.6%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Dewan Housing Finance Corporation Limited Been A Good Investment?
Dewan Housing Finance Corporation Limited has not done too badly by shareholders, with a total return of 1.5%, over three years. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary…
We compared the total CEO remuneration paid by Dewan Housing Finance Corporation Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven’t been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Dewan Housing Finance (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
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 editorial-team@simplywallst.com.
