How Much Is Kajaria Ceramics' (NSE:KAJARIACER) CEO Getting Paid?

Ashok Kajaria became the CEO of Kajaria Ceramics Limited (NSE:KAJARIACER) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Kajaria Ceramics.

See our latest analysis for Kajaria Ceramics

How Does Total Compensation For Ashok Kajaria Compare With Other Companies In The Industry?

At the time of writing, our data shows that Kajaria Ceramics Limited has a market capitalization of ₹123b, and reported total annual CEO compensation of ₹49m for the year to March 2020. We note that's an increase of 8.5% above last year. Notably, the salary which is ₹29.8m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from ₹73b to ₹234b, the reported median CEO total compensation was ₹119m. This suggests that Ashok Kajaria is paid below the industry median. Moreover, Ashok Kajaria also holds ₹2.4b worth of Kajaria Ceramics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Kajaria Ceramics pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Kajaria Ceramics Limited's Growth

Over the last three years, Kajaria Ceramics Limited has shrunk its earnings per share by 10% per year. In the last year, its revenue is down 20%.

Overall this is not a very positive result for shareholders. 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. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Kajaria Ceramics Limited Been A Good Investment?

Kajaria Ceramics Limited has served shareholders reasonably well, with a total return of 13% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As previously discussed, Ashok is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. While we have not been overly impressed by shareholder returns, EPS growth has been negative over the last three years, a real headache for the company. So, although we can't say CEO compensation is very high, shareholders might want to see an improvement in overall performance before agreeing that Ashok deserves a bump.

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 Kajaria Ceramics that investors should be aware of in a dynamic business environment.

Switching gears from Kajaria Ceramics, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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