Shareholders May Be More Conservative With Uttam Sugar Mills Limited's (NSE:UTTAMSUGAR) CEO Compensation For Now

Key Insights

• Uttam Sugar Mills to hold its Annual General Meeting on 18th of September
• Total pay for CEO Raj Adlakha includes ₹40.8m salary
• The overall pay is 611% above the industry average
• Uttam Sugar Mills' total shareholder return over the past three years was 80% while its EPS grew by 18% over the past three years

Performance at Uttam Sugar Mills Limited (NSE:UTTAMSUGAR) has been reasonably good and CEO Raj Adlakha has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 18th of September. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Uttam Sugar Mills

Comparing Uttam Sugar Mills Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Uttam Sugar Mills Limited has a market capitalization of ₹13b, and reported total annual CEO compensation of ₹107m for the year to March 2024. That's a slight decrease of 4.6% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹41m.

On examining similar-sized companies in the Indian Food industry with market capitalizations between ₹8.4b and ₹34b, we discovered that the median CEO total compensation of that group was ₹15m. This suggests that Raj Adlakha is paid more than the median for the industry. Moreover, Raj Adlakha also holds ₹691m worth of Uttam Sugar Mills stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹41m	₹41m	38%
Other	₹66m	₹71m	62%
Total Compensation	₹107m	₹112m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. In Uttam Sugar Mills' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Uttam Sugar Mills Limited's Growth Numbers

Uttam Sugar Mills Limited's earnings per share (EPS) grew 18% per year over the last three years. It achieved revenue growth of 6.6% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Uttam Sugar Mills Limited Been A Good Investment?

We think that the total shareholder return of 80%, over three years, would leave most Uttam Sugar Mills Limited shareholders smiling. 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...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Uttam Sugar Mills you should be aware of, and 1 of them doesn't sit too well with us.

Important note: Uttam 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.