Shareholders May Be More Conservative With Ponni Sugars (Erode) Limited's (NSE:PONNIERODE) CEO Compensation For Now

Under the guidance of CEO Ramanathan Narayanan, Ponni Sugars (Erode) Limited (NSE:PONNIERODE) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 20 July 2021. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Ponni Sugars (Erode)

How Does Total Compensation For Ramanathan Narayanan Compare With Other Companies In The Industry?

Our data indicates that Ponni Sugars (Erode) Limited has a market capitalization of ₹2.7b, and total annual CEO compensation was reported as ₹18m for the year to March 2021. That's a notable increase of 28% on last year. Notably, the salary which is ₹15.4m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹3.0m. This suggests that Ramanathan Narayanan is paid more than the median for the industry. What's more, Ramanathan Narayanan holds ₹947k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹15m	₹8.1m	85%
Other	₹2.8m	₹6.1m	15%
Total Compensation	₹18m	₹14m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. It's interesting to note that Ponni Sugars (Erode) allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Ponni Sugars (Erode) Limited's Growth Numbers

Ponni Sugars (Erode) Limited's earnings per share (EPS) grew 97% per year over the last three years. Its revenue is down 17% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Ponni Sugars (Erode) Limited Been A Good Investment?

Most shareholders would probably be pleased with Ponni Sugars (Erode) Limited for providing a total return of 184% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Ponni Sugars (Erode) that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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