Should Shareholders Reconsider Cheviot Company Limited's (NSE:CHEVIOT) CEO Compensation Package?

Key Insights

• Cheviot to hold its Annual General Meeting on 7th of August
• Total pay for CEO Harsh Kanoria includes ₹2.40m salary
• The total compensation is 583% higher than the average for the industry
• Cheviot's EPS declined by 8.1% over the past three years while total shareholder loss over the past three years was 8.1%

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Shareholders will probably not be too impressed with the underwhelming results at Cheviot Company Limited (NSE:CHEVIOT) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 7th of August. 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.

View our latest analysis for Cheviot

How Does Total Compensation For Harsh Kanoria Compare With Other Companies In The Industry?

According to our data, Cheviot Company Limited has a market capitalization of ₹6.9b, and paid its CEO total annual compensation worth ₹25m over the year to March 2025. That is, the compensation was roughly the same as last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹2.4m.

On comparing similar-sized companies in the Indian Luxury industry with market capitalizations below ₹18b, we found that the median total CEO compensation was ₹3.6m. Accordingly, our analysis reveals that Cheviot Company Limited pays Harsh Kanoria north of the industry median. What's more, Harsh Kanoria holds ₹505m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, around 97% of total compensation represents salary and 3% is other remuneration. Cheviot sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Cheviot Company Limited's Growth Numbers

Over the last three years, Cheviot Company Limited has shrunk its earnings per share by 8.1% per year. Its revenue is down 5.1% 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. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Cheviot Company Limited Been A Good Investment?

With a three year total loss of 8.1% for the shareholders, Cheviot Company Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. 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 3 warning signs for Cheviot that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.