Shareholders May Not Be So Generous With North Eastern Carrying Corporation Limited's (NSE:NECCLTD) CEO Compensation And Here's Why

North Eastern Carrying Corporation Limited (NSE:NECCLTD) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 30 September 2022. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for North Eastern Carrying

Comparing North Eastern Carrying Corporation Limited's CEO Compensation With The Industry

At the time of writing, our data shows that North Eastern Carrying Corporation Limited has a market capitalization of ₹1.3b, and reported total annual CEO compensation of ₹4.8m for the year to March 2022. This was the same as last year. Notably, the salary of ₹4.8m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹16b, the reported median total CEO compensation was ₹3.0m. Accordingly, our analysis reveals that North Eastern Carrying Corporation Limited pays Sunil Jain north of the industry median.

Component	2022	2021	Proportion (2022)
Salary	₹4.8m	₹4.8m	100%
Other	-	-	-
Total Compensation	₹4.8m	₹4.8m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Speaking on a company level, North Eastern Carrying prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

A Look at North Eastern Carrying Corporation Limited's Growth Numbers

Over the last three years, North Eastern Carrying Corporation Limited has shrunk its earnings per share by 1.6% per year. It saw its revenue drop 2.1% over the last year.

The lack of EPS growth is certainly uninspiring. 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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has North Eastern Carrying Corporation Limited Been A Good Investment?

We think that the total shareholder return of 386%, over three years, would leave most North Eastern Carrying Corporation Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

North Eastern Carrying rewards its CEO solely through a salary, ignoring non-salary benefits completely. Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for North Eastern Carrying (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.