We Discuss Why Kajaria Ceramics Limited's (NSE:KAJARIACER) CEO May Deserve A Higher Pay Packet

Key Insights

• Kajaria Ceramics' Annual General Meeting to take place on 6th of September
• CEO Ashok Kajaria's total compensation includes salary of ₹53.5m
• Total compensation is 37% below industry average
• Kajaria Ceramics' total shareholder return over the past three years was 16% while its EPS grew by 2.2% over the past three years

The decent performance at Kajaria Ceramics Limited (NSE:KAJARIACER) recently will please most shareholders as they go into the AGM coming up on 6th of September. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

View our latest analysis for Kajaria Ceramics

Comparing Kajaria Ceramics Limited's CEO Compensation With The Industry

Our data indicates that Kajaria Ceramics Limited has a market capitalization of ₹216b, and total annual CEO compensation was reported as ₹57m for the year to March 2024. This was the same as last year. In particular, the salary of ₹53.5m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Building industry with market capitalizations ranging from ₹168b to ₹536b, the reported median CEO total compensation was ₹91m. Accordingly, Kajaria Ceramics pays its CEO under the industry median. Furthermore, Ashok Kajaria directly owns ₹4.1b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹54m	₹54m	94%
Other	₹3.2m	₹3.2m	6%
Total Compensation	₹57m	₹57m	100%

Talking in terms of the industry, salary represented approximately 87% of total compensation out of all the companies we analyzed, while other remuneration made up 13% of the pie. Kajaria Ceramics is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Kajaria Ceramics Limited's Growth Numbers

Kajaria Ceramics Limited has seen its earnings per share (EPS) increase by 2.2% a year over the past three years. In the last year, its revenue is up 4.3%.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Kajaria Ceramics Limited Been A Good Investment?

Kajaria Ceramics Limited has generated a total shareholder return of 16% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Kajaria Ceramics that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.