Shareholders Will Probably Hold Off On Increasing S H Kelkar and Company Limited's (NSE:SHK) CEO Compensation For The Time Being

As many shareholders of S H Kelkar and Company Limited (NSE:SHK) will be aware, they have not made a gain on their investment in the past three years. 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 10 August 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. 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 S H Kelkar

Comparing S H Kelkar and Company Limited's CEO Compensation With the industry

At the time of writing, our data shows that S H Kelkar and Company Limited has a market capitalization of ₹24b, and reported total annual CEO compensation of ₹29m for the year to March 2021. We note that's an increase of 69% above last year. Notably, the salary which is ₹14.5m, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from ₹15b to ₹59b, we found that the median CEO total compensation was ₹25m. From this we gather that Kedar Vaze is paid around the median for CEOs in the industry. Moreover, Kedar Vaze also holds ₹3.5b worth of S H Kelkar stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	₹15m	₹13m	50%
Other	₹15m	₹4.3m	50%
Total Compensation	₹29m	₹17m	100%

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. It's interesting to note that S H Kelkar allocates a smaller portion of compensation to salary in comparison to the broader industry.

A Look at S H Kelkar and Company Limited's Growth Numbers

S H Kelkar and Company Limited has seen its earnings per share (EPS) increase by 17% a year over the past three years. It achieved revenue growth of 19% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has S H Kelkar and Company Limited Been A Good Investment?

Since shareholders would have lost about 9.3% over three years, some S H Kelkar and Company Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for S H Kelkar that investors should be aware of in a dynamic business environment.

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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