Shareholders Will Probably Hold Off On Increasing Kirloskar Electric Company Limited's (NSE:KECL) CEO Compensation For The Time Being

Key Insights

• Kirloskar Electric to hold its Annual General Meeting on 16th of September
• CEO Anand Hunnur's total compensation includes salary of ₹4.35m
• The total compensation is 270% higher than the average for the industry
• Over the past three years, Kirloskar Electric's EPS fell by 70% and over the past three years, the total shareholder return was 164%

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The share price of Kirloskar Electric Company Limited (NSE:KECL) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. Some of these issues will occupy shareholders' minds as the AGM rolls around on 16th of September. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for Kirloskar Electric

Comparing Kirloskar Electric Company Limited's CEO Compensation With The Industry

Our data indicates that Kirloskar Electric Company Limited has a market capitalization of ₹7.7b, and total annual CEO compensation was reported as ₹20m for the year to March 2025. We note that's an increase of 33% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹4.4m.

For comparison, other companies in the Indian Electrical industry with market capitalizations below ₹18b, reported a median total CEO compensation of ₹5.4m. Accordingly, our analysis reveals that Kirloskar Electric Company Limited pays Anand Hunnur north of the industry median.

Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. Kirloskar Electric sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Kirloskar Electric Company Limited's Growth

Over the last three years, Kirloskar Electric Company Limited has shrunk its earnings per share by 70% per year. Its revenue is down 5.3% over the previous year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Kirloskar Electric Company Limited Been A Good Investment?

We think that the total shareholder return of 164%, over three years, would leave most Kirloskar Electric Company Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to 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 4 warning signs for Kirloskar Electric (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the 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.