Stock Analysis

A Look At KCP's (NSE:KCP) CEO Remuneration

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V. L. Dutt became the CEO of The KCP Limited (NSE:KCP) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether KCP pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for KCP

How Does Total Compensation For V. L. Dutt Compare With Other Companies In The Industry?

According to our data, The KCP Limited has a market capitalization of ₹9.6b, and paid its CEO total annual compensation worth ₹15m over the year to March 2020. That's a notable decrease of 15% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹15m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹2.5m. This suggests that V. L. Dutt is paid more than the median for the industry. What's more, V. L. Dutt holds ₹736m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary ₹15m ₹14m 100%
Other - ₹4.1m -
Total Compensation₹15m ₹18m100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Speaking on a company level, KCP prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

NSEI:KCP CEO Compensation February 27th 2021

A Look at The KCP Limited's Growth Numbers

The KCP Limited has seen its earnings per share (EPS) increase by 7.8% a year over the past three years. It achieved revenue growth of 3.6% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has The KCP Limited Been A Good Investment?

Given the total shareholder loss of 40% over three years, many shareholders in The KCP Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

KCP pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, KCP pays its CEO higher than the norm for similar-sized companies belonging to the same industry. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. And the situation doesn't look all that good when you see V. L. is remunerated higher than the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for KCP you should be aware of, and 1 of them is a bit unpleasant.

Important note: KCP 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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