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M. Mahabaleshwara Bhat became the CEO of The Karnataka Bank Limited (NSE:KTKBANK) in 2017. 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 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.
Check out our latest analysis for Karnataka Bank
How Does M. Mahabaleshwara Bhat's Compensation Compare With Similar Sized Companies?
Our data indicates that The Karnataka Bank Limited is worth ₹22b, and total annual CEO compensation was reported as ₹7.1m for the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at ₹6.5m. When we examined a selection of companies with market caps ranging from ₹14b to ₹57b, we found the median CEO total compensation was ₹23m.
A first glance this seems like a real positive for shareholders, since M. Mahabaleshwara Bhat is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at Karnataka Bank, below.
Is The Karnataka Bank Limited Growing?
Over the last three years The Karnataka Bank Limited has shrunk its earnings per share by an average of 11% per year (measured with a line of best fit). Its revenue is up 32% over last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.
Has The Karnataka Bank Limited Been A Good Investment?
Since shareholders would have lost about 33% over three years, some The Karnataka Bank Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The Karnataka Bank Limited is currently paying its CEO below what is normal for companies of its size.
It's well worth noting that while M. Mahabaleshwara Bhat is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Karnataka Bank.