Kamdhenu Limited's (NSE:KAMDHENU) CEO Might Not Expect Shareholders To Be So Generous This Year

Shareholders will probably not be too impressed with the underwhelming results at Kamdhenu Limited (NSE:KAMDHENU) recently. At the upcoming AGM on 27 September 2021, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Kamdhenu

How Does Total Compensation For Satish Agarwal Compare With Other Companies In The Industry?

At the time of writing, our data shows that Kamdhenu Limited has a market capitalization of ₹5.2b, and reported total annual CEO compensation of ₹14m for the year to March 2021. That's slightly lower by 4.1% over the previous year. In particular, the salary of ₹14.4m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.0m. Accordingly, our analysis reveals that Kamdhenu Limited pays Satish Agarwal north of the industry median. What's more, Satish Agarwal holds ₹467m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹14m	₹15m	99%
Other	₹79k	₹79k	1%
Total Compensation	₹14m	₹15m	100%

Talking in terms of the industry, salary represented approximately 100% of total compensation out of all the companies we analyzed, while other remuneration made up 0.1927% of the pie. Kamdhenu has gone down a largely traditional route, paying Satish Agarwal a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Kamdhenu Limited's Growth

Kamdhenu Limited has reduced its earnings per share by 3.6% a year over the last three years. It saw its revenue drop 17% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Kamdhenu Limited Been A Good Investment?

Since shareholders would have lost about 1.9% over three years, some Kamdhenu Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Kamdhenu pays its CEO a majority of compensation through a salary. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Kamdhenu (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Kamdhenu, 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.
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