It's Unlikely That Oriental Carbon & Chemicals Limited's (NSE:OCCL) CEO Will See A Huge Pay Rise This Year

In the past three years, shareholders of Oriental Carbon & Chemicals Limited (NSE:OCCL) have seen a loss on their investment. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 03 August 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Oriental Carbon & Chemicals

How Does Total Compensation For Arvindbhai Kumar Goenka Compare With Other Companies In The Industry?

At the time of writing, our data shows that Oriental Carbon & Chemicals Limited has a market capitalization of ₹11b, and reported total annual CEO compensation of ₹27m for the year to March 2021. That's a fairly small increase of 6.7% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹7.8m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹6.1m. This suggests that Arvindbhai Kumar Goenka is paid more than the median for the industry. What's more, Arvindbhai Kumar Goenka holds ₹336m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹7.8m	₹7.3m	29%
Other	₹19m	₹18m	71%
Total Compensation	₹27m	₹25m	100%

On an industry level, roughly 88% of total compensation represents salary and 12% is other remuneration. It's interesting to note that Oriental Carbon & Chemicals allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Oriental Carbon & Chemicals Limited's Growth

Oriental Carbon & Chemicals Limited's earnings per share (EPS) grew 13% per year over the last three years. In the last year, its revenue is down 3.3%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Oriental Carbon & Chemicals Limited Been A Good Investment?

With a three year total loss of 2.5% for the shareholders, Oriental Carbon & Chemicals Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Oriental Carbon & Chemicals that investors should be aware of in a dynamic business environment.

Important note: Oriental Carbon & Chemicals is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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