How Much is Ruchira Papers' (NSE:RUCHIRA) CEO Getting Paid?

This article will reflect on the compensation paid to Umesh Garg who has served as CEO of Ruchira Papers Limited (NSE:RUCHIRA) since 1983. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Ruchira Papers

Comparing Ruchira Papers Limited's CEO Compensation With the industry

At the time of writing, our data shows that Ruchira Papers Limited has a market capitalization of ₹1.3b, and reported total annual CEO compensation of ₹23m for the year to March 2020. That is, the compensation was roughly the same as last year. Notably, the salary of ₹23m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹7.8m. Accordingly, our analysis reveals that Ruchira Papers Limited pays Umesh Garg north of the industry median. Moreover, Umesh Garg also holds ₹132m worth of Ruchira Papers stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. At the company level, Ruchira Papers pays Umesh Garg solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Ruchira Papers Limited's Growth

Over the last three years, Ruchira Papers Limited has shrunk its earnings per share by 30% per year. In the last year, its revenue is down 20%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Ruchira Papers Limited Been A Good Investment?

Since shareholders would have lost about 67% over three years, some Ruchira Papers Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Ruchira Papers pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Ruchira Papers pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Ruchira Papers that investors should think about before committing capital to this stock.

Switching gears from Ruchira Papers, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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