Is the CEO of The Federal Bank Limited (NSE: FEDERALBNK) paying well with his peers?

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Shyam Srinivasan became the CEO of The Federal Bank Limited (NSE: FEDERALBNK) in 2010. First, this article will compare the compensation of the CEO to that of companies of similar size. We will then examine the growth that the company demonstrates. Finally, as a second measure of performance, we will look at shareholder returns in recent years. The purpose of all this is to examine the relevance of CEO compensation levels.

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How does Shyam Srinivasan's compensation compare to similar-sized companies?

According to our data, the Federal Bank Limited has a market capitalization of £ 164 billion and pays its CEO an annual total remuneration of $ 381 million. (This is based on the year until 2018). We believe that total compensation is higher, but we note that the CEO's salary is lower at ₹ 12 million. As part of our analysis, we looked at companies in the same jurisdiction, with a market capitalization of ₹ 71b to ₹ 226b. The CEO's total median compensation was £ 36 million.

As you can see, Shyam Srinivasan is better paid than the median salary of CEOs of similar sized companies in the same market. However, this does not necessarily mean that the Federal Bank Limited pays too much. We can get a better idea of ​​the generosity of compensation by examining the performance of the underlying business.

The chart below shows the evolution of CEO's compensation at Federal Bank from one year to the next.

NSEI: FEDERALBNK CEO Compensation February 14, 19

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Is Federal Bank Limited growing?

On average, over the past three years, Federal Bank Limited has reduced its earnings per share by 3.3% annually (measured using a best fit line). In the past year, her revenues have increased by 8.4%.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Few shareholders would be happy to read that the The modest increase in turnover over the last year is not enough to make me forget the disappointing change in earnings per share.These factors suggest that the company's performance would not really justify a high salary package CEO, which could be of interest to shareholders free visualization of analyst forecasts. "Data-reactid =" 48 "> Few shareholders would be happy to read that earnings per share are down over three years – the modest increase in revenue over the last year is not enough to make me forget about disappointing change in earnings per share These factors suggest that the company's performance would not really justify a high salary package for the CEO. free visualization of analyst forecasts.

Was Federal Bank Limited a good investment?

Most shareholders would probably like The Federal Bank Limited to provide a total return of 87% over three years. This strong performance could mean that some shareholders are not worried if the CEO should be paid more than normal for a company of this size.

In summary…

We examined the amount paid by Federal Bank Limited to its CEO and compared it to the amount paid by companies of similar size. Our data suggests that it pays above the median compensation of the CEO in this group.

We believe that many shareholders would be disappointed by the growth of the business over the past three years.

However, we can not argue with the high returns to shareholders over the same period. Given this situation, we doubt that shareholders are particularly concerned about the compensation of the Chief Executive Officer. Shareholders may want to check for free if any insiders of the Federal Bank buy or sell shares.

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "We can say that the quality of the business is much more important as the CEO compensation levels. free list of interesting companies, which have a high return on equity and a low debt. "data-reactid =" 55 "> It can be argued that the quality of the company is far greater than the compensation levels of the President and CEO. free list of interesting companies, which have a high return on equity and a low debt.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "To help readers understand the past volatility of the financial market in the short term, our goal is to provide you with a long-term research analysis based solely on fundamental data. Note that our analysis does not take into account the latest price sensitive business announcements.

The author is an independent contributor and, at the time of publication, was not positioned in the actions mentioned. For errors that need to be corrected, please contact the publisher at editorial-team@simplywallst.com.

"data-reactid =" 56 "> To help readers understand the short-term volatility of the financial market, we aim to provide you with a long-term research analysis based solely on fundamental data. ignores the latest price sensitive business announcements.

The author is an independent contributor and, at the time of publication, was not positioned in the actions mentioned. For errors that need to be corrected, please contact the publisher at editorial-team@simplywallst.com.