Here's Why Shareholders May Want To Be Cautious With Increasing The Ruby Mills Limited's (NSE:RUBYMILLS) CEO Pay Packet

Key Insights

• Ruby Mills' Annual General Meeting to take place on 9th of September
• CEO Purav Shah's total compensation includes salary of ₹12.5m
• The overall pay is 292% above the industry average
• Ruby Mills' three-year loss to shareholders was 29% while its EPS grew by 4.2% over the past three years

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The underwhelming share price performance of The Ruby Mills Limited (NSE:RUBYMILLS) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 9th of September. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Ruby Mills

How Does Total Compensation For Purav Shah Compare With Other Companies In The Industry?

Our data indicates that The Ruby Mills Limited has a market capitalization of ₹7.6b, and total annual CEO compensation was reported as ₹14m for the year to March 2025. This was the same amount the CEO received in the prior year. We note that the salary portion, which stands at ₹12.5m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Indian Luxury industry with market capitalizations under ₹18b, the reported median total CEO compensation was ₹3.6m. Accordingly, our analysis reveals that The Ruby Mills Limited pays Purav Shah north of the industry median. Furthermore, Purav Shah directly owns ₹174m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 98% of total compensation out of all the companies we analyzed, while other remuneration made up 2% of the pie. Ruby Mills is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at The Ruby Mills Limited's Growth Numbers

The Ruby Mills Limited's earnings per share (EPS) grew 4.2% per year over the last three years. It achieved revenue growth of 15% over the last year.

This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. 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 The Ruby Mills Limited Been A Good Investment?

Given the total shareholder loss of 29% over three years, many shareholders in The Ruby Mills Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Ruby Mills that investors should look into moving forward.

Important note: Ruby Mills is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.