What We Learned About Kellton Tech Solutions' (NSE:KELLTONTEC) CEO Compensation

Karanjit Singh has been the CEO of Kellton Tech Solutions Limited (NSE:KELLTONTEC) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Kellton Tech Solutions.

View our latest analysis for Kellton Tech Solutions

Comparing Kellton Tech Solutions Limited's CEO Compensation With the industry

According to our data, Kellton Tech Solutions Limited has a market capitalization of ₹4.8b, and paid its CEO total annual compensation worth ₹5.5m over the year to March 2020. This means that the compensation hasn't changed much from last year. Notably, the salary of ₹5.5m is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.2m. This suggests that Karanjit Singh is paid more than the median for the industry. Furthermore, Karanjit Singh directly owns ₹18m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 98% of total compensation represents salary and 2.0% is other remuneration. At the company level, Kellton Tech Solutions pays Karanjit Singh solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Kellton Tech Solutions Limited's Growth Numbers

Over the past three years, Kellton Tech Solutions Limited has seen its earnings per share (EPS) grow by 4.9% per year. It saw its revenue drop 3.6% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Kellton Tech Solutions Limited Been A Good Investment?

With a total shareholder return of 2.3% over three years, Kellton Tech Solutions Limited has done okay by shareholders. 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.

To Conclude...

Kellton Tech Solutions pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Karanjit is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the company lacks EPS growth, and returns to shareholders are less than stellar, over the last three years. Overall, although the company has delivered steady performance, we would like to see an improvement in key metrics before we can say the high CEO compensation is justified.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Kellton Tech Solutions that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. 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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