Increases to CEO Compensation Might Be Put On Hold For Now at The Ruby Mills Limited (NSE:RUBYMILLS)

Key Insights

• Ruby Mills will host its Annual General Meeting on 20th of September
• CEO Purav Shah's total compensation includes salary of ₹12.5m
• The overall pay is 292% above the industry average
• Ruby Mills' EPS grew by 20% over the past three years while total shareholder return over the past three years was 117%

Under the guidance of CEO Purav Shah, The Ruby Mills Limited (NSE:RUBYMILLS) has performed reasonably well recently. As shareholders go into the upcoming AGM on 20th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

View our latest analysis for Ruby Mills

Comparing The Ruby Mills Limited's CEO Compensation With The Industry

Our data indicates that The Ruby Mills Limited has a market capitalization of ₹10b, and total annual CEO compensation was reported as ₹14m for the year to March 2024. Notably, that's an increase of 27% over the year before. We note that the salary portion, which stands at ₹12.5m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Indian Luxury industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹3.6m. Accordingly, our analysis reveals that The Ruby Mills Limited pays Purav Shah north of the industry median. Furthermore, Purav Shah directly owns ₹233m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹13m	₹10.0m	89%
Other	₹1.6m	₹1.2m	11%
Total Compensation	₹14m	₹11m	100%

Talking in terms of the industry, salary represented approximately 99% of total compensation out of all the companies we analyzed, while other remuneration made up 1% of the pie. Although there is a difference in how total compensation is set, Ruby Mills more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at The Ruby Mills Limited's Growth Numbers

The Ruby Mills Limited has seen its earnings per share (EPS) increase by 20% a year over the past three years. It saw its revenue drop 8.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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?

Most shareholders would probably be pleased with The Ruby Mills Limited for providing a total return of 117% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Ruby Mills that you should be aware of before investing.

Switching gears from Ruby Mills, 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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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.