Key Things To Understand About Mukand's (NSE:MUKANDLTD) CEO Pay Cheque

A. Kulkarni is the CEO of Mukand Limited (NSE:MUKANDLTD), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Mukand

How Does Total Compensation For A. Kulkarni Compare With Other Companies In The Industry?

According to our data, Mukand Limited has a market capitalization of ₹8.8b, and paid its CEO total annual compensation worth ₹8.3m over the year to March 2020. We note that's a decrease of 21% compared to last year. In particular, the salary of ₹8.20m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹4.2m. Hence, we can conclude that A. Kulkarni is remunerated higher than the industry median.

Speaking on an industry level, nearly 99% of total compensation represents salary, while the remainder of 1.1% is other remuneration. Mukand pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. 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.

Mukand Limited's Growth

Over the last three years, Mukand Limited has shrunk its earnings per share by 123% per year. In the last year, its revenue is down 15%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Mukand Limited Been A Good Investment?

Since shareholders would have lost about 19% over three years, some Mukand Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Mukand pays its CEO a majority of compensation through a salary. As previously discussed, A. is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

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 Mukand 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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