A Quick Analysis On Rajshree Sugars and Chemicals' (NSE:RAJSREESUG) CEO Compensation

R. Varadarajan is the CEO of Rajshree Sugars and Chemicals Limited (NSE:RAJSREESUG), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Rajshree Sugars and Chemicals.

Check out our latest analysis for Rajshree Sugars and Chemicals

How Does Total Compensation For R. Varadarajan Compare With Other Companies In The Industry?

Our data indicates that Rajshree Sugars and Chemicals Limited has a market capitalization of ₹442m, and total annual CEO compensation was reported as ₹7.3m for the year to March 2020. That's a slightly lower by 6.2% over the previous year. Notably, the salary which is ₹6.24m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.2m. Hence, we can conclude that R. Varadarajan is remunerated higher than the industry median.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Rajshree Sugars and Chemicals 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.

A Look at Rajshree Sugars and Chemicals Limited's Growth Numbers

Rajshree Sugars and Chemicals Limited has reduced its earnings per share by 28% a year over the last three years. It saw its revenue drop 2.0% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Rajshree Sugars and Chemicals Limited Been A Good Investment?

Given the total shareholder loss of 60% over three years, many shareholders in Rajshree Sugars and Chemicals Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As previously discussed, R. is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

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 2 warning signs for Rajshree Sugars and Chemicals that you should be aware of before investing.

Switching gears from Rajshree Sugars and Chemicals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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