Shareholders Will Probably Hold Off On Increasing Kothari Products Limited's (NSE:KOTHARIPRO) CEO Compensation For The Time Being

Key Insights

• Kothari Products to hold its Annual General Meeting on 14th of September
• Total pay for CEO Deepak Kothari includes ₹2.40m salary
• Total compensation is 142% above industry average
• Over the past three years, Kothari Products' EPS grew by 39% and over the past three years, the total shareholder return was 74%

Performance at Kothari Products Limited (NSE:KOTHARIPRO) has been reasonably good and CEO Deepak Kothari has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 14th of September. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Kothari Products

Comparing Kothari Products Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Kothari Products Limited has a market capitalization of ₹5.3b, and reported total annual CEO compensation of ₹4.3m for the year to March 2024. That's a slight decrease of 3.0% on the prior year. In particular, the salary of ₹2.40m, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the India Trade Distributors industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹1.8m. Accordingly, our analysis reveals that Kothari Products Limited pays Deepak Kothari north of the industry median. Furthermore, Deepak Kothari directly owns ₹2.9b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹2.4m	₹2.4m	55%
Other	₹1.9m	₹2.1m	45%
Total Compensation	₹4.3m	₹4.5m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Kothari Products pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Kothari Products Limited's Growth

Over the past three years, Kothari Products Limited has seen its earnings per share (EPS) grow by 39% per year. In the last year, its revenue is down 15%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Kothari Products Limited Been A Good Investment?

We think that the total shareholder return of 74%, over three years, would leave most Kothari Products Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Kothari Products (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Kothari Products, 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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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.