We Think Everest Kanto Cylinder Limited's (NSE:EKC) CEO Compensation Looks Fair

Key Insights

• Everest Kanto Cylinder's Annual General Meeting to take place on 22nd of September
• Salary of ₹21.7m is part of CEO Puneet Prem Khurana's total remuneration
• The total compensation is similar to the average for the industry
• Everest Kanto Cylinder's EPS grew by 157% over the past three years while total shareholder return over the past three years was 344%

We have been pretty impressed with the performance at Everest Kanto Cylinder Limited (NSE:EKC) recently and CEO Puneet Prem Khurana deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 22nd of September. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

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 ₹36m for the year to March 2023. Notably, that's a decrease of 38% over the year before. Notably, the salary which is ₹21.7m, represents most of the total compensation being paid.

On examining similar-sized companies in the Indian Packaging industry with market capitalizations between ₹8.3b and ₹33b, we discovered that the median CEO total compensation of that group was ₹36m. From this we gather that Puneet Prem Khurana is paid around the median for CEOs in the industry. What's more, Puneet Prem Khurana holds ₹1.3b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₹22m	₹20m	61%
Other	₹14m	₹37m	39%
Total Compensation	₹36m	₹57m	100%

Speaking on an industry level, nearly 77% of total compensation represents salary, while the remainder of 23% is other remuneration. In Everest Kanto Cylinder's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Everest Kanto Cylinder Limited's Growth

Over the past three years, Everest Kanto Cylinder Limited has seen its earnings per share (EPS) grow by 157% per year. Its revenue is down 33% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Everest Kanto Cylinder Limited Been A Good Investment?

Boasting a total shareholder return of 344% 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.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 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.