Kedar Vaze has been the CEO of S H Kelkar and Company Limited (NSE:SHK) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether S H Kelkar pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for S H Kelkar
Comparing S H Kelkar and Company Limited's CEO Compensation With the industry
According to our data, S H Kelkar and Company Limited has a market capitalization of ₹17b, and paid its CEO total annual compensation worth ₹17m over the year to March 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at ₹12.9m constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations ranging from ₹7.3b to ₹29b, the reported median CEO total compensation was ₹18m. So it looks like S H Kelkar compensates Kedar Vaze in line with the median for the industry. Furthermore, Kedar Vaze directly owns ₹2.3b worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | ₹13m | ₹13m | 75% |
| Other | ₹4.3m | ₹4.2m | 25% |
| Total Compensation | ₹17m | ₹17m | 100% |
Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 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. 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.
S H Kelkar and Company Limited's Growth
S H Kelkar and Company Limited has reduced its earnings per share by 9.0% a year over the last three years. Its revenue is up 2.5% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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?
With a three year total loss of 54% for the shareholders, S H Kelkar and Company Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we noted earlier, S H Kelkar pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
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. That's why we did some digging and identified 4 warning signs for S H Kelkar that you should be aware of before investing.
Important note: S H Kelkar 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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About NSEI:SHK
S H Kelkar
Manufactures and supplies fragrances, flavors, and aroma ingredients in India.
Undervalued moderate.
