A Quick Analysis On Sutlej Textiles and Industries' (NSE:SUTLEJTEX) CEO Salary

The CEO of Sutlej Textiles and Industries Limited (NSE:SUTLEJTEX) is Suresh Khandelia, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Sutlej Textiles and Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Sutlej Textiles and Industries

Comparing Sutlej Textiles and Industries Limited's CEO Compensation With the industry

At the time of writing, our data shows that Sutlej Textiles and Industries Limited has a market capitalization of ₹7.0b, and reported total annual CEO compensation of ₹62m for the year to March 2020. That is, the compensation was roughly the same as last year. In particular, the salary of ₹49.9m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹3.7m. This suggests that Suresh Khandelia is paid more than the median for the industry.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. In Sutlej Textiles and Industries' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Sutlej Textiles and Industries Limited's Growth Numbers

Sutlej Textiles and Industries Limited has reduced its earnings per share by 85% a year over the last three years. Its revenue is down 30% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Sutlej Textiles and Industries Limited Been A Good Investment?

Given the total shareholder loss of 44% over three years, many shareholders in Sutlej Textiles and Industries Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Suresh is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 1 which can't be ignored) in Sutlej Textiles and Industries we think you should know about.

Switching gears from Sutlej Textiles and Industries, 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. 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.
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