What Did NCL Industries' (NSE:NCLIND) CEO Take Home Last Year?

Ravi Kalidindi became the CEO of NCL Industries Limited (NSE:NCLIND) in 2003, 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.

Check out our latest analysis for NCL Industries

How Does Total Compensation For Ravi Kalidindi Compare With Other Companies In The Industry?

At the time of writing, our data shows that NCL Industries Limited has a market capitalization of ₹6.7b, and reported total annual CEO compensation of ₹33m for the year to March 2020. We note that's an increase of 8.0% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹12m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹2.6m. Hence, we can conclude that Ravi Kalidindi is remunerated higher than the industry median. Moreover, Ravi Kalidindi also holds ₹382m worth of NCL Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 94% of total compensation out of all the companies we analyzed, while other remuneration made up 6.4% of the pie. NCL Industries sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

NCL Industries Limited's Growth

NCL Industries Limited's earnings per share (EPS) grew 6.3% per year over the last three years. Its revenue is up 7.5% over the last year.

We're not particularly impressed by the revenue growth, 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. 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 NCL Industries Limited Been A Good Investment?

Given the total shareholder loss of 40% over three years, many shareholders in NCL Industries 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...

As we touched on above, NCL Industries Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. This doesn't look good when you see that Ravi is earning more than the industry median. All things considered, we believe shareholders would be disappointed to see Ravi's compensation grow without first seeing an improvement in the performance of the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for NCL Industries 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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