What Does Simbhaoli Sugars' (NSE:SIMBHALS) CEO Pay Reveal?

This article will reflect on the compensation paid to Gursimran Mann who has served as CEO of Simbhaoli Sugars Limited (NSE:SIMBHALS) since 2013. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Simbhaoli Sugars

Comparing Simbhaoli Sugars Limited's CEO Compensation With the industry

According to our data, Simbhaoli Sugars Limited has a market capitalization of ₹289m, and paid its CEO total annual compensation worth ₹12m over the year to March 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at ₹10.1m constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below ₹14b, we found that the median total CEO compensation was ₹3.2m. Hence, we can conclude that Gursimran Mann is remunerated higher than the industry median. Moreover, Gursimran Mann also holds ₹29m worth of Simbhaoli Sugars stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. In Simbhaoli Sugars' case, non-salary compensation represents a greater slice of total remuneration, 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 Simbhaoli Sugars Limited's Growth Numbers

Simbhaoli Sugars Limited's earnings per share (EPS) grew 109% per year over the last three years. It achieved revenue growth of 8.9% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Simbhaoli Sugars Limited Been A Good Investment?

Given the total shareholder loss of 53% over three years, many shareholders in Simbhaoli Sugars 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...

As previously discussed, Gursimran is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Gursimran is earning a very handsome sum.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Simbhaoli Sugars (1 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Simbhaoli Sugars, 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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