Here's What We Think About KDDL's (NSE:KDDL) CEO Pay

Yashovardhan Saboo has been the CEO of KDDL Limited (NSE:KDDL) since 1981, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether KDDL pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for KDDL

Comparing KDDL Limited's CEO Compensation With the industry

Our data indicates that KDDL Limited has a market capitalization of ₹3.4b, and total annual CEO compensation was reported as ₹18m for the year to March 2020. We note that's an increase of 9.3% above last year. In particular, the salary of ₹13.7m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.6m. This suggests that Yashovardhan Saboo is paid more than the median for the industry. Furthermore, Yashovardhan Saboo directly owns ₹573m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. KDDL sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

KDDL Limited's Growth

Over the last three years, KDDL Limited has shrunk its earnings per share by 80% per year. Its revenue is down 24% 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. These factors suggest that the business performance wouldn't really justify a high pay packet 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 KDDL Limited Been A Good Investment?

With a three year total loss of 13% for the shareholders, KDDL Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, KDDL pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 5 warning signs (and 2 which are a bit unpleasant) in KDDL we think you should know about.

Important note: KDDL is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. 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.
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