How Much Does Emkay Taps and Cutting Tools' (NSE:EMKAYTOOLS) CEO Make?

This article will reflect on the compensation paid to Ajay Kanoria who has served as CEO of Emkay Taps and Cutting Tools Limited (NSE:EMKAYTOOLS) since 2008. This analysis will also assess whether Emkay Taps and Cutting Tools pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Emkay Taps and Cutting Tools

Comparing Emkay Taps and Cutting Tools Limited's CEO Compensation With the industry

According to our data, Emkay Taps and Cutting Tools Limited has a market capitalization of ₹715m, and paid its CEO total annual compensation worth ₹9.2m over the year to March 2020. That's a notable increase of 45% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹3.6m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹6.1m. Accordingly, our analysis reveals that Emkay Taps and Cutting Tools Limited pays Ajay Kanoria north of the industry median. Moreover, Ajay Kanoria also holds ₹347m worth of Emkay Taps and Cutting Tools stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Emkay Taps and Cutting Tools pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Emkay Taps and Cutting Tools Limited's Growth

Emkay Taps and Cutting Tools Limited has seen its earnings per share (EPS) increase by 6.2% a year over the past three years. In the last year, its revenue is up 1.4%.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Emkay Taps and Cutting Tools Limited Been A Good Investment?

With a three year total loss of 42% for the shareholders, Emkay Taps and Cutting Tools Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Emkay Taps and Cutting Tools Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Over the last three years, shareholder returns have been downright disappointing for Emkay Taps and Cutting Tools, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look good when you see that Ajay is earning more than the industry median. All things considered, we believe shareholders would be disappointed to see Ajay's compensation grow without first seeing an improvement in the performance of the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Emkay Taps and Cutting Tools (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.

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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