Key Things To Understand About Sakuma Exports' (NSE:SAKUMA) CEO Pay Cheque

The CEO of Sakuma Exports Limited (NSE:SAKUMA) is Saurabh Malhotra, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Sakuma Exports pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Sakuma Exports

How Does Total Compensation For Saurabh Malhotra Compare With Other Companies In The Industry?

According to our data, Sakuma Exports Limited has a market capitalization of ₹1.3b, and paid its CEO total annual compensation worth ₹9.3m over the year to March 2020. We note that's an increase of 29% above last year. Notably, the salary of ₹9.3m is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below ₹14b, we found that the median total CEO compensation was ₹2.5m. This suggests that Saurabh Malhotra is paid more than the median for the industry. What's more, Saurabh Malhotra holds ₹350m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. On a company level, Sakuma Exports prefers to reward its CEO through a salary, opting not to pay Saurabh Malhotra through non-salary benefits. 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 Sakuma Exports Limited's Growth Numbers

Over the last three years, Sakuma Exports Limited has shrunk its earnings per share by 42% per year. In the last year, its revenue is down 56%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. 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 Sakuma Exports Limited Been A Good Investment?

Since shareholders would have lost about 72% over three years, some Sakuma Exports Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Sakuma Exports rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, Sakuma Exports Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Sakuma Exports (1 can't be ignored!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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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