How Much Does Kamat Hotels (India)'s (NSE:KAMATHOTEL) CEO Make?

This article will reflect on the compensation paid to Vithal Kamat who has served as CEO of Kamat Hotels (India) Limited (NSE:KAMATHOTEL) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Kamat Hotels (India).

Check out our latest analysis for Kamat Hotels (India)

Comparing Kamat Hotels (India) Limited's CEO Compensation With the industry

At the time of writing, our data shows that Kamat Hotels (India) Limited has a market capitalization of ₹829m, and reported total annual CEO compensation of ₹9.8m for the year to March 2020. That is, the compensation was roughly the same as last year. Notably, the salary which is ₹9.60m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹2.8m. This suggests that Vithal Kamat is paid more than the median for the industry. Moreover, Vithal Kamat also holds ₹118m worth of Kamat Hotels (India) stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Kamat Hotels (India) is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Kamat Hotels (India) Limited's Growth

Over the past three years, Kamat Hotels (India) Limited has seen its earnings per share (EPS) grow by 142% per year. In the last year, its revenue is down 60%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 Kamat Hotels (India) Limited Been A Good Investment?

Since shareholders would have lost about 70% over three years, some Kamat Hotels (India) Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Kamat Hotels (India) pays its CEO a majority of compensation through a salary. As we noted earlier, Kamat Hotels (India) pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 2 warning signs for Kamat Hotels (India) (1 can't be ignored!) that you should be aware of before investing here.

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. 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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