What We Learned About K.M. Sugar Mills' (NSE:KMSUGAR) CEO Pay

The CEO of K.M. Sugar Mills Limited (NSE:KMSUGAR) is Subhash Agarwal, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether K.M. Sugar Mills pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for K.M. Sugar Mills

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

According to our data, K.M. Sugar Mills Limited has a market capitalization of ₹1.0b, and paid its CEO total annual compensation worth ₹4.4m over the year to March 2020. We note that's an increase of 48% above 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. So it looks like K.M. Sugar Mills compensates Subhash Agarwal in line with the median for the industry.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. K.M. Sugar Mills 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.

K.M. Sugar Mills Limited's Growth

Over the past three years, K.M. Sugar Mills Limited has seen its earnings per share (EPS) grow by 13% per year. In the last year, its revenue is up 53%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has K.M. Sugar Mills Limited Been A Good Investment?

Since shareholders would have lost about 23% over three years, some K.M. Sugar Mills Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Subhash is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But on the bright side, EPS growth is positive over the same period. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for K.M. Sugar Mills that investors should be aware of in a dynamic business environment.

Important note: K.M. Sugar Mills 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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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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