What Did Bannari Amman Sugars' (NSE:BANARISUG) CEO Take Home Last Year?

This article will reflect on the compensation paid to B. Saravanan who has served as CEO of Bannari Amman Sugars Limited (NSE:BANARISUG) since 2010. This analysis will also assess whether Bannari Amman Sugars pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Bannari Amman Sugars

How Does Total Compensation For B. Saravanan Compare With Other Companies In The Industry?

Our data indicates that Bannari Amman Sugars Limited has a market capitalization of ₹16b, and total annual CEO compensation was reported as ₹28m for the year to March 2020. Notably, that's a decrease of 13% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹9.0m.

On comparing similar companies from the same industry with market caps ranging from ₹7.3b to ₹29b, we found that the median CEO total compensation was ₹21m. Accordingly, our analysis reveals that Bannari Amman Sugars Limited pays B. Saravanan north of the industry median. Moreover, B. Saravanan also holds ₹230m worth of Bannari Amman Sugars stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Bannari Amman Sugars pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Bannari Amman Sugars Limited's Growth Numbers

Over the last three years, Bannari Amman Sugars Limited has shrunk its earnings per share by 8.9% per year. It achieved revenue growth of 46% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bannari Amman Sugars Limited Been A Good Investment?

Given the total shareholder loss of 42% over three years, many shareholders in Bannari Amman Sugars Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, Bannari Amman Sugars pays its CEO higher than the norm for similar-sized companies belonging to the same industry. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. On a more positive note, the company has produced a more positive revenue growth more recently. Few would argue that it's wise for the company to pay any more, before returns improve.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Bannari Amman Sugars (1 doesn't sit too well with us!) 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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