A Quick Analysis On Kalyani Steels' (NSE:KSL) CEO Salary

Ravindra Goyal became the CEO of Kalyani Steels Limited (NSE:KSL) in 2011, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Kalyani Steels

How Does Total Compensation For Ravindra Goyal Compare With Other Companies In The Industry?

Our data indicates that Kalyani Steels Limited has a market capitalization of ₹13b, and total annual CEO compensation was reported as ₹80m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at ₹58.1m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from ₹7.3b to ₹29b, the reported median CEO total compensation was ₹30m. Accordingly, our analysis reveals that Kalyani Steels Limited pays Ravindra Goyal north of the industry median.

Talking in terms of the industry, salary represented approximately 99% of total compensation out of all the companies we analyzed, while other remuneration made up 1.1% of the pie. It's interesting to note that Kalyani Steels allocates a smaller portion of compensation to salary in comparison to the broader industry. 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.

Kalyani Steels Limited's Growth

Kalyani Steels Limited has seen its earnings per share (EPS) increase by 5.9% a year over the past three years. In the last year, its revenue is down 13%.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Kalyani Steels Limited Been A Good Investment?

With a three year total loss of 1.5% for the shareholders, Kalyani Steels Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Kalyani Steels pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for Kalyani Steels, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look great when you consider Ravindra is taking home compensation north of the industry average. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

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 2 warning signs for Kalyani Steels that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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