How Is Magadh Sugar & Energy's (NSE:MAGADSUGAR) CEO Compensated?

The CEO of Magadh Sugar & Energy Limited (NSE:MAGADSUGAR) is Chandra Mohan, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Magadh Sugar & Energy

Comparing Magadh Sugar & Energy Limited's CEO Compensation With the industry

Our data indicates that Magadh Sugar & Energy Limited has a market capitalization of ₹1.6b, and total annual CEO compensation was reported as ₹9.7m for the year to March 2020. We note that's an increase of 12% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹9.7m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹3.5m. Accordingly, our analysis reveals that Magadh Sugar & Energy Limited pays Chandra Mohan north of the industry median.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. At the company level, Magadh Sugar & Energy pays Chandra Mohan solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Magadh Sugar & Energy Limited's Growth

Magadh Sugar & Energy Limited's earnings per share (EPS) grew 27% per year over the last three years. In the last year, its revenue is up 32%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Magadh Sugar & Energy Limited Been A Good Investment?

Given the total shareholder loss of 22% over three years, many shareholders in Magadh Sugar & Energy Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Magadh Sugar & Energy rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Magadh Sugar & Energy pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we'd stop short of calling it inappropriate, we think Chandra is earning a very handsome sum.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Magadh Sugar & Energy you should be aware of, and 1 of them is concerning.

Important note: Magadh Sugar & Energy 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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