Krishna Maheshwari has been the CEO of UltraTech Cement Limited (NSE:ULTRACEMCO) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Krishna Maheshwari’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that UltraTech Cement Limited has a market cap of ₹1.1t, and is paying total annual CEO compensation of ₹136m. (This figure is for the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at ₹94m. We looked at a group of companies with market capitalizations over ₹570b and the median CEO compensation was ₹95m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
It would therefore appear that UltraTech Cement Limited pays Krishna Maheshwari more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at UltraTech Cement has changed over time.
Is UltraTech Cement Limited Growing?
UltraTech Cement Limited has reduced its earnings per share by an average of 2.7% a year, over the last three years. It achieved revenue growth of 28% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has UltraTech Cement Limited Been A Good Investment?
Boasting a total shareholder return of 42% over three years, UltraTech Cement Limited has done well by shareholders. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
We compared total CEO remuneration at UltraTech Cement Limited with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying UltraTech Cement shares with their own money (free access).
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.