Shareholders Would Not Be Objecting To KSB Limited's (NSE:KSB) CEO Compensation And Here's Why

Key Insights

• KSB to hold its Annual General Meeting on 27th of June
• CEO Rajeev Jain's total compensation includes salary of ₹12.7m
• The overall pay is comparable to the industry average
• KSB's EPS grew by 19% over the past three years while total shareholder return over the past three years was 414%

It would be hard to discount the role that CEO Rajeev Jain has played in delivering the impressive results at KSB Limited (NSE:KSB) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 27th of June. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for KSB

Comparing KSB Limited's CEO Compensation With The Industry

At the time of writing, our data shows that KSB Limited has a market capitalization of ₹162b, and reported total annual CEO compensation of ₹52m for the year to December 2023. This means that the compensation hasn't changed much from last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹13m.

On comparing similar companies from the Indian Machinery industry with market caps ranging from ₹84b to ₹268b, we found that the median CEO total compensation was ₹45m. From this we gather that Rajeev Jain is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	₹13m	₹12m	24%
Other	₹40m	₹40m	76%
Total Compensation	₹52m	₹53m	100%

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 9% is other remuneration. It's interesting to note that KSB allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

KSB Limited's Growth

Over the past three years, KSB Limited has seen its earnings per share (EPS) grow by 19% per year. Its revenue is up 22% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has KSB Limited Been A Good Investment?

We think that the total shareholder return of 414%, over three years, would leave most KSB 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...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

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 KSB that you should be aware of before investing.

Switching gears from KSB, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com