How Should Investors Feel About Mangalore Chemicals & Fertilizers' (NSE:MANGCHEFER) CEO Remuneration?

This article will reflect on the compensation paid to Narayanan Krishnan who has served as CEO of Mangalore Chemicals & Fertilizers Limited (NSE:MANGCHEFER) since 2016. This analysis will also assess whether Mangalore Chemicals & Fertilizers pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Mangalore Chemicals & Fertilizers

How Does Total Compensation For Narayanan Krishnan Compare With Other Companies In The Industry?

Our data indicates that Mangalore Chemicals & Fertilizers Limited has a market capitalization of ₹3.9b, and total annual CEO compensation was reported as ₹12m for the year to March 2020. We note that's an increase of 8.0% above last year. Notably, the salary of ₹12m 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 ₹6.1m. This suggests that Narayanan Krishnan is paid more than the median for the industry.

On an industry level, around 90% of total compensation represents salary and 9.5% is other remuneration. Speaking on a company level, Mangalore Chemicals & Fertilizers prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Mangalore Chemicals & Fertilizers Limited's Growth Numbers

Mangalore Chemicals & Fertilizers Limited's earnings per share (EPS) grew 45% per year over the last three years. In the last year, its revenue is down 20%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Mangalore Chemicals & Fertilizers Limited Been A Good Investment?

Since shareholders would have lost about 50% over three years, some Mangalore Chemicals & Fertilizers Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Mangalore Chemicals & Fertilizers pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, Mangalore Chemicals & Fertilizers pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed with its EPS growth, but it's disappointing to see negative shareholder returns over the same period. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Mangalore Chemicals & Fertilizers you should be aware of, and 1 of them is a bit concerning.

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