The Compensation For K.M. Sugar Mills Limited's (NSE:KMSUGAR) CEO Looks Deserved And Here's Why

The performance at K.M. Sugar Mills Limited (NSE:KMSUGAR) has been quite strong recently and CEO Subhash Agarwal has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 29 September 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for K.M. Sugar Mills

Comparing K.M. Sugar Mills Limited's CEO Compensation With the industry

At the time of writing, our data shows that K.M. Sugar Mills Limited has a market capitalization of ₹2.3b, and reported total annual CEO compensation of ₹4.4m for the year to March 2021. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at ₹3.60m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹3.4m. From this we gather that Subhash Agarwal is paid around the median for CEOs in the industry.

Component	2021	2020	Proportion (2021)
Salary	₹3.6m	₹2.4m	82%
Other	₹794k	₹2.0m	18%
Total Compensation	₹4.4m	₹4.4m	100%

On an industry level, roughly 100% of total compensation represents salary and 0.4853% is other remuneration. K.M. Sugar Mills sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

K.M. Sugar Mills Limited's Growth

K.M. Sugar Mills Limited's earnings per share (EPS) grew 22% per year over the last three years. It saw its revenue drop 18% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 K.M. Sugar Mills Limited Been A Good Investment?

Boasting a total shareholder return of 160% over three years, K.M. Sugar Mills Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 1 which is a bit concerning) in K.M. Sugar Mills we think you should know about.

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.
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