Shareholders May Not Be So Generous With Everest Kanto Cylinder Limited's (NSE:EKC) CEO Compensation And Here's Why

Under the guidance of CEO Puneet Prem Khurana, Everest Kanto Cylinder Limited (NSE:EKC) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 23 September 2021. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Everest Kanto Cylinder

Comparing Everest Kanto Cylinder Limited's CEO Compensation With the industry

Our data indicates that Everest Kanto Cylinder Limited has a market capitalization of ₹14b, and total annual CEO compensation was reported as ₹21m for the year to March 2021. That's a slight decrease of 5.7% on the prior year. Notably, the salary which is ₹18.5m, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from ₹7.4b to ₹29b, the reported median CEO total compensation was ₹14m. Accordingly, our analysis reveals that Everest Kanto Cylinder Limited pays Puneet Prem Khurana north of the industry median. Furthermore, Puneet Prem Khurana directly owns ₹996m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	₹18m	₹20m	86%
Other	₹2.9m	₹3.1m	14%
Total Compensation	₹21m	₹23m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. It's interesting to note that Everest Kanto Cylinder allocates a smaller portion of compensation to salary in comparison to the broader 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.

Everest Kanto Cylinder Limited's Growth

Everest Kanto Cylinder Limited has seen its earnings per share (EPS) increase by 43% a year over the past three years. Its revenue is up 50% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Everest Kanto Cylinder Limited Been A Good Investment?

Boasting a total shareholder return of 258% over three years, Everest Kanto Cylinder Limited has done well by shareholders. 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...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Everest Kanto Cylinder that investors should think about before committing capital to this stock.

Important note: Everest Kanto Cylinder 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.
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