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The results at Entertainment Network (India) Limited (NSE:ENIL) have been quite disappointing recently and CEO Prashant Panday bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 28 September 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.
Check out our latest analysis for Entertainment Network (India)
Comparing Entertainment Network (India) Limited’s CEO Compensation With the industry
At the time of writing, our data shows that Entertainment Network (India) Limited has a market capitalization of ₹9.0b, and reported total annual CEO compensation of ₹23m for the year to March 2021. That’s a notable decrease of 54% on last year. We note that the salary portion, which stands at ₹22.2m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹11m. This suggests that Prashant Panday is paid more than the median for the industry. Furthermore, Prashant Panday directly owns ₹4.1m worth of shares in the company, implying that they are deeply invested in the company’s success.
| Component | 2021 | 2020 | Proportion (2021) |
| Salary | ₹22m | ₹49m | 96% |
| Other | ₹806k | ₹1.0m | 4% |
| Total Compensation | ₹23m | ₹50m | 100% |
On an industry level, roughly 99% of total compensation represents salary and 1% is other remuneration. Investors will find it interesting that Entertainment Network (India) pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.
A Look at Entertainment Network (India) Limited’s Growth Numbers
Over the last three years, Entertainment Network (India) Limited has shrunk its earnings per share by 108% per year. Its revenue is down 38% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..
Has Entertainment Network (India) Limited Been A Good Investment?
With a total shareholder return of -70% over three years, Entertainment Network (India) Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude…
Entertainment Network (India) pays its CEO a majority of compensation through a salary. Not only have shareholders not seen a favorable return on their investment, but the business hasn’t performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management’s plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That’s why we did some digging and identified 1 warning sign for Entertainment Network (India) that you should be aware of before investing.
Important note: Entertainment Network (India) is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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