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In 2003 Ravi Kalidindi was appointed CEO of NCL Industries Limited (NSE:NCLIND). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Ravi Kalidindi's Compensation Compare With Similar Sized Companies?
Our data indicates that NCL Industries Limited is worth ₹5.5b, and total annual CEO compensation is ₹31m. (This figure is for the year to March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at ₹11m. We took a group of companies with market capitalizations below ₹14b, and calculated the median CEO total compensation to be ₹1.3m.
As you can see, Ravi Kalidindi is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean NCL Industries Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at NCL Industries, below.
Is NCL Industries Limited Growing?
Over the last three years NCL Industries Limited has shrunk its earnings per share by an average of 17% per year (measured with a line of best fit). Its revenue is up 11% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has NCL Industries Limited Been A Good Investment?
With a three year total loss of 6.6%, NCL Industries Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount NCL Industries Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling NCL Industries shares (free trial).
Important note: NCL Industries may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.