Most Shareholders Will Probably Find That The CEO Compensation For Sapphire Foods India Limited (NSE:SAPPHIRE) Is Reasonable

Key Insights

• Sapphire Foods India will host its Annual General Meeting on 8th of August
• CEO Sanjay Purohit's total compensation includes salary of ₹37.6m
• Total compensation is similar to the industry average
• Sapphire Foods India's EPS declined by 57% over the past three years while total shareholder return over the past three years was 24%

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The share price of Sapphire Foods India Limited (NSE:SAPPHIRE) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 8th of August. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Sapphire Foods India

How Does Total Compensation For Sanjay Purohit Compare With Other Companies In The Industry?

According to our data, Sapphire Foods India Limited has a market capitalization of ₹103b, and paid its CEO total annual compensation worth ₹38m over the year to March 2025. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹38m.

For comparison, other companies in the Indian Hospitality industry with market capitalizations ranging between ₹35b and ₹140b had a median total CEO compensation of ₹40m. This suggests that Sapphire Foods India remunerates its CEO largely in line with the industry average. What's more, Sanjay Purohit holds ₹510m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 95% of total compensation represents salary, while the remainder of 5% is other remuneration. Speaking on a company level, Sapphire Foods India prefers to tread along a traditional path, disbursing all compensation through a 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 Sapphire Foods India Limited's Growth Numbers

Over the last three years, Sapphire Foods India Limited has shrunk its earnings per share by 57% per year. In the last year, its revenue is up 11%.

Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Sapphire Foods India Limited Been A Good Investment?

Sapphire Foods India Limited has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Sapphire Foods India pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the positive returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about whether these returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Sapphire Foods India (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Sapphire Foods India, 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.