We Think Some Shareholders May Hesitate To Increase J.K. Cement Limited's (NSE:JKCEMENT) CEO Compensation

Key Insights

• J.K. Cement to hold its Annual General Meeting on 19th of July
• Total pay for CEO Madhavkrishna Singhania includes ₹39.7m salary
• The overall pay is 111% above the industry average
• Over the past three years, J.K. Cement's EPS grew by 3.7% and over the past three years, the total shareholder return was 40%

Under the guidance of CEO Madhavkrishna Singhania, J.K. Cement Limited (NSE:JKCEMENT) has performed reasonably well recently. As shareholders go into the upcoming AGM on 19th of July, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for J.K. Cement

How Does Total Compensation For Madhavkrishna Singhania Compare With Other Companies In The Industry?

According to our data, J.K. Cement Limited has a market capitalization of ₹335b, and paid its CEO total annual compensation worth ₹240m over the year to March 2024. That's a notable increase of 55% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹40m.

On examining similar-sized companies in the Indian Basic Materials industry with market capitalizations between ₹167b and ₹534b, we discovered that the median CEO total compensation of that group was ₹114m. Accordingly, our analysis reveals that J.K. Cement Limited pays Madhavkrishna Singhania north of the industry median.

Component	2024	2023	Proportion (2024)
Salary	₹40m	₹30m	17%
Other	₹200m	₹125m	83%
Total Compensation	₹240m	₹155m	100%

On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. J.K. Cement pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

J.K. Cement Limited's Growth

J.K. Cement Limited has seen its earnings per share (EPS) increase by 3.7% a year over the past three years. In the last year, its revenue is up 19%.

We think the revenue growth is good. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has J.K. Cement Limited Been A Good Investment?

Boasting a total shareholder return of 40% over three years, J.K. Cement Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus 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 can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for J.K. Cement that investors should be aware of in a dynamic business environment.

Switching gears from J.K. Cement, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com