Shareholders May Be More Conservative With K.C.P. Sugar and Industries Corporation Limited's (NSE:KCPSUGIND) CEO Compensation For Now

Key Insights

• K.C.P. Sugar and Industries to hold its Annual General Meeting on 27th of September
• Salary of ₹4.80m is part of CEO Irmgard Velagapudi Rao's total remuneration
• The overall pay is 68% above the industry average
• K.C.P. Sugar and Industries' EPS grew by 690% over the past three years while total shareholder return over the past three years was 162%

Performance at K.C.P. Sugar and Industries Corporation Limited (NSE:KCPSUGIND) has been reasonably good and CEO Irmgard Velagapudi Rao 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 27th of September. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for K.C.P. Sugar and Industries

Comparing K.C.P. Sugar and Industries Corporation Limited's CEO Compensation With The Industry

According to our data, K.C.P. Sugar and Industries Corporation Limited has a market capitalization of ₹4.1b, and paid its CEO total annual compensation worth ₹5.0m over the year to March 2023. That's a modest increase of 4.5% on the prior year. In particular, the salary of ₹4.80m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Indian Food industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹3.0m. Accordingly, our analysis reveals that K.C.P. Sugar and Industries Corporation Limited pays Irmgard Velagapudi Rao north of the industry median. Moreover, Irmgard Velagapudi Rao also holds ₹66m worth of K.C.P. Sugar and Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	₹4.8m	₹4.8m	96%
Other	₹220k	₹4.0k	4%
Total Compensation	₹5.0m	₹4.8m	100%

On an industry level, roughly 95% of total compensation represents salary and 5% is other remuneration. K.C.P. Sugar and 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 dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at K.C.P. Sugar and Industries Corporation Limited's Growth Numbers

K.C.P. Sugar and Industries Corporation Limited has seen its earnings per share (EPS) increase by 690% a year over the past three years. Its revenue is down 6.3% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has K.C.P. Sugar and Industries Corporation Limited Been A Good Investment?

Boasting a total shareholder return of 162% over three years, K.C.P. Sugar and Industries Corporation Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Irmgard Velagapudi receives almost all of their compensation through a salary. Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for K.C.P. Sugar and 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. 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.