Here's Why Shareholders Should Examine J. Kumar Infraprojects Limited's (NSE:JKIL) CEO Compensation Package More Closely

Shareholders will probably not be too impressed with the underwhelming results at J. Kumar Infraprojects Limited (NSE:JKIL) recently. At the upcoming AGM on 21 September 2021, shareholders can hear from the board including their plans for turning around performance. 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. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for J. Kumar Infraprojects

Comparing J. Kumar Infraprojects Limited's CEO Compensation With the industry

According to our data, J. Kumar Infraprojects Limited has a market capitalization of ₹15b, and paid its CEO total annual compensation worth ₹28m over the year to March 2021. We note that's a decrease of 8.3% compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹28m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹7.4b and ₹29b had a median total CEO compensation of ₹30m. So it looks like J. Kumar Infraprojects compensates Kamal Gupta in line with the median for the industry. What's more, Kamal Gupta holds ₹1.1b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹28m	₹30m	100%
Other	-	-	-
Total Compensation	₹28m	₹30m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. At the company level, J. Kumar Infraprojects pays Kamal Gupta solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at J. Kumar Infraprojects Limited's Growth Numbers

Over the last three years, J. Kumar Infraprojects Limited has shrunk its earnings per share by 8.4% per year. It achieved revenue growth of 14% over the last year.

The decline in EPS is a bit concerning. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has J. Kumar Infraprojects Limited Been A Good Investment?

With a three year total loss of 15% for the shareholders, J. Kumar Infraprojects Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

J. Kumar Infraprojects pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

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 J. Kumar Infraprojects that investors should think about before committing capital to this stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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