Shareholders may be wondering what CEO Rashesh Shah plans to contribute to the less-than-great performance. to improve Edelweiss Financial Services Limited (NSE: EDELWEISS) recently. At the next Annual General Meeting on September 3rd, 2021, you can influence the management’s decision-making process by passing resolutions, including the remuneration of the Executive Board. Voting on executive compensation could be an effective way to influence management, as studies have shown that having the right compensation incentives can impact business performance. In our opinion, the CEO compensation doesn’t look excessive and we’re discussing why.
Check out our latest analysis for Edelweiss Financial Services
How does Rashesh Shah’s total compensation compare to other companies in the industry?
At the time of writing, our data shows Edelweiss Financial Services Limited has a market capitalization of 71 billion yen and a total annual CEO compensation of 11 million yen for the year ended March 2021. That is a remarkable 9.5% decrease from the previous year. Notably, the ₹ 11 million salary is the entirety of CEO compensation.
When we researched similarly sized companies in the industry with market capitalizations between ¥ 30 billion and ¥ 119 billion, we found that the average total compensation for this group’s CEO was ¥ 29 million. In other words, Edelweiss Financial Services pays its CEO less than the industry average. In addition, Rashesh Shah holds 12 billion yen worth of shares in his own name, suggesting they have a lot of skin in the game.
At the industry level, total total compensation represents salary, while non-salary compensation is completely ignored. At company level, Edelweiss Financial Services prefers to go a traditional way and pays all remuneration through a salary. When salary dominates total compensation, it suggests that CEO compensation is less focused on the variable component that is usually linked to performance.
A look at the growth figures for Edelweiss Financial Services Limited
Over the past three years, Edelweiss Financial Services Limited has shrunk its earnings per share by 18% per year. It achieved 42% sales growth last year.
The drop in EPS over three years is arguably worrying. On the other hand, sales growth is strong, which suggests a brighter future. It is difficult to make a statement about the development of the business at the moment. This can possibly be observed. If you are looking ahead, you might want to have this free visual report on top Analyst Forecasts for the future profit of the company ..
Was Edelweiss Financial Services Limited a good investment?
The shareholders of Edelweiss Financial Services Limited would not have liked the return of -71% over three years. This suggests that paying the CEO too generously would be unwise.
Edelweiss Financial Services pays the CEO remuneration exclusively through a salary, with the non-salary remuneration being completely ignored. That shareholders are sitting on a loss is certainly daunting. The poor performance of the stock price could have to do with the lack of earnings growth. At the upcoming AGM, shareholders will have an opportunity to discuss these concerns with the board of directors and to assess whether the board’s plan is likely to improve corporate performance.
CEO compensation is an important area to keep track of, but we also need to look out for other characteristics of the company. We have identified 4 warning signs for Edelweiss Financial Services (1 makes us a little uncomfortable!) That you should know before investing here.
Important NOTE: Edelweiss Financial Services is an exciting stock, but we understand investors are looking for an unencumbered balance sheet and blockbuster returns. You might find something better on this list of interesting companies with high ROE and low debt.
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