Here's Why Dwarikesh Sugar Industries Limited's (NSE:DWARKESH) CEO Compensation Is The Least Of Shareholders' Concerns

Performance at Dwarikesh Sugar Industries Limited (NSE:DWARKESH) has been reasonably good and CEO Balkishan Maheshwari has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 20 July 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

View our latest analysis for Dwarikesh Sugar Industries

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

According to our data, Dwarikesh Sugar Industries Limited has a market capitalization of ₹15b, and paid its CEO total annual compensation worth ₹12m over the year to March 2021. That's a notable decrease of 9.3% on last year. We note that the salary portion, which stands at ₹11.5m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₹7.5b and ₹30b had a median total CEO compensation of ₹13m. So it looks like Dwarikesh Sugar Industries compensates Balkishan Maheshwari in line with the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	₹11m	₹11m	96%
Other	₹500k	₹2.5m	4%
Total Compensation	₹12m	₹13m	100%

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Dwarikesh Sugar Industries is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to 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.

Dwarikesh Sugar Industries Limited's Growth

Dwarikesh Sugar Industries Limited has reduced its earnings per share by 3.4% a year over the last three years. It achieved revenue growth of 38% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one 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 Dwarikesh Sugar Industries Limited Been A Good Investment?

We think that the total shareholder return of 454%, over three years, would leave most Dwarikesh Sugar Industries Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Dwarikesh Sugar Industries pays its CEO a majority of compensation through a salary. Although the company has performed relatively well, we still think there are some areas that could be improved. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which is a bit unpleasant) in Dwarikesh Sugar Industries we think you should know about.

Important note: Dwarikesh Sugar Industries is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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