Is NCL Industries Limited's (NSE:NCLIND) CEO Paid Enough Relative To Peers?

Ravi Kalidindi has been the CEO of NCL Industries Limited (NSE:NCLIND) since 2003. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for NCL Industries

How Does Ravi Kalidindi's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that NCL Industries Limited has a market cap of ₹2.4b, and reported total annual CEO compensation of ₹30m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at ₹11m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined a group of similar sized companies, with market capitalizations of below ₹15b. The median CEO total compensation in that group is ₹3.6m.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where NCL Industries stands. On an industry level, roughly 79% of total compensation represents salary and 21% is other remuneration. NCL Industries sets aside a smaller share of compensation for salary, in comparison to the overall industry.

As you can see, Ravi Kalidindi is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean NCL Industries Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You can see a visual representation of the CEO compensation at NCL Industries, below.

Is NCL Industries Limited Growing?

On average over the last three years, NCL Industries Limited has shrunk earnings per share by 4.9% each year (measured with a line of best fit). It saw its revenue drop 2.1% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has NCL Industries Limited Been A Good Investment?

With a three year total loss of 73%, NCL Industries Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by NCL Industries Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Moving away from CEO compensation for the moment, we've identified 4 warning signs for NCL Industries that you should be aware of before investing.

If you want to buy a stock that is better than NCL Industries, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.