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V. Mathew became the CEO of The South Indian Bank Limited (NSE:SOUTHBANK) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for South Indian Bank
How Does V. Mathew's Compensation Compare With Similar Sized Companies?
Our data indicates that The South Indian Bank Limited is worth ₹19b, and total annual CEO compensation was reported as ₹12m for the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at ₹10m. We examined companies with market caps from ₹7.1b to ₹28b, and discovered that the median CEO total compensation of that group was ₹20m.
A first glance this seems like a real positive for shareholders, since V. Mathew is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at South Indian Bank has changed over time.
Is The South Indian Bank Limited Growing?
On average over the last three years, The South Indian Bank Limited has shrunk earnings per share by 23% each year (measured with a line of best fit). Its revenue is up 8.1% over last year.
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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has The South Indian Bank Limited Been A Good Investment?
With a three year total loss of 43%, The South Indian Bank Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
It looks like The South Indian Bank Limited pays its CEO less than similar sized companies.
V. Mathew is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. Considering all these factors, we'd stop short of saying the CEO pay is too high, but we don't think shareholders would want to see a pay rise before business performance improves. So you may want to check if insiders are buying South Indian Bank shares with their own money (free access).