A Quick Analysis On Kothari Petrochemicals' (NSE:KOTHARIPET) CEO Salary

This article will reflect on the compensation paid to Arjun Kothari who has served as CEO of Kothari Petrochemicals Limited (NSE:KOTHARIPET) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Kothari Petrochemicals.

View our latest analysis for Kothari Petrochemicals

Comparing Kothari Petrochemicals Limited's CEO Compensation With the industry

According to our data, Kothari Petrochemicals Limited has a market capitalization of ₹1.1b, and paid its CEO total annual compensation worth ₹12m over the year to March 2020. That's a notable increase of 46% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹5.0m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹6.6m. Hence, we can conclude that Arjun Kothari is remunerated higher than the industry median.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. It's interesting to note that Kothari Petrochemicals allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Kothari Petrochemicals Limited's Growth Numbers

Kothari Petrochemicals Limited's earnings per share (EPS) grew 21% per year over the last three years. Its revenue is down 20% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Kothari Petrochemicals Limited Been A Good Investment?

Given the total shareholder loss of 36% over three years, many shareholders in Kothari Petrochemicals Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Kothari Petrochemicals pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed with its EPS growth, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Considering overall performance, we can't say Arjun is underpaid, in fact compensation is definitely on the higher side.

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. We did our research and spotted 1 warning sign for Kothari Petrochemicals that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. 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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