A Look At Dwarikesh Sugar Industries' (NSE:DWARKESH) CEO Remuneration

Balkishan Maheshwari has been the CEO of Dwarikesh Sugar Industries Limited (NSE:DWARKESH) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Dwarikesh Sugar Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Dwarikesh Sugar Industries

How Does Total Compensation For Balkishan Maheshwari Compare With Other Companies In The Industry?

Our data indicates that Dwarikesh Sugar Industries Limited has a market capitalization of ₹5.9b, and total annual CEO compensation was reported as ₹13m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of ₹10.7m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.8m. Accordingly, our analysis reveals that Dwarikesh Sugar Industries Limited pays Balkishan Maheshwari north of the industry median.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Dwarikesh Sugar Industries pays a modest slice of remuneration through salary, as compared 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.

Dwarikesh Sugar Industries Limited's Growth

Dwarikesh Sugar Industries Limited has reduced its earnings per share by 22% a year over the last three years. Its revenue is up 64% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. 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. 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 Dwarikesh Sugar Industries Limited Been A Good Investment?

Given the total shareholder loss of 38% over three years, many shareholders in Dwarikesh Sugar 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, Balkishan is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Meanwhile, the company has been unable to show any EPS growth, and shareholder returns are also in the red. In contrast, revenue growth for the company has been showing a positive trend. Few would argue that it's wise for the company to pay any more, before returns improve.

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. We did our research and spotted 4 warning signs for Dwarikesh Sugar Industries that investors should look into moving forward.

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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