We Think The Compensation For Krishna Institute of Medical Sciences Limited's (NSE:KIMS) CEO Looks About Right

Key Insights

• Krishna Institute of Medical Sciences' Annual General Meeting to take place on 29th of August
• Total pay for CEO Abhinay Bollineni includes ₹17.0m salary
• Total compensation is similar to the industry average
• Over the past three years, Krishna Institute of Medical Sciences' EPS grew by 2.3% and over the past three years, the total shareholder return was 90%

CEO Abhinay Bollineni has done a decent job of delivering relatively good performance at Krishna Institute of Medical Sciences Limited (NSE:KIMS) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 29th of August. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for Krishna Institute of Medical Sciences

How Does Total Compensation For Abhinay Bollineni Compare With Other Companies In The Industry?

According to our data, Krishna Institute of Medical Sciences Limited has a market capitalization of ₹195b, and paid its CEO total annual compensation worth ₹22m over the year to March 2024. That's a notable increase of 10.0% on last year. Notably, the salary which is ₹17.0m, represents most of the total compensation being paid.

In comparison with other companies in the Indian Healthcare industry with market capitalizations ranging from ₹84b to ₹269b, the reported median CEO total compensation was ₹28m. This suggests that Krishna Institute of Medical Sciences remunerates its CEO largely in line with the industry average. Moreover, Abhinay Bollineni also holds ₹135m worth of Krishna Institute of Medical Sciences stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹17m	₹15m	77%
Other	₹5.0m	₹5.0m	23%
Total Compensation	₹22m	₹20m	100%

On an industry level, roughly 97% of total compensation represents salary and 3% is other remuneration. It's interesting to note that Krishna Institute of Medical Sciences allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Krishna Institute of Medical Sciences Limited's Growth Numbers

Krishna Institute of Medical Sciences Limited has seen its earnings per share (EPS) increase by 2.3% a year over the past three years. It achieved revenue growth of 12% over the last year.

We think the revenue growth is good. And, while modest, the EPS growth is noticeable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Krishna Institute of Medical Sciences Limited Been A Good Investment?

Most shareholders would probably be pleased with Krishna Institute of Medical Sciences Limited for providing a total return of 90% over three years. 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.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Krishna Institute of Medical Sciences that investors should look into moving forward.

Important note: Krishna Institute of Medical Sciences 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. 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.