How Is Andhra Sugars' (NSE:ANDHRSUGAR) CEO Compensated?

Pendyala Chowdary has been the CEO of The Andhra Sugars Limited (NSE:ANDHRSUGAR) since 2012, and this article will examine the executive's compensation 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 Andhra Sugars.

See our latest analysis for Andhra Sugars

Comparing The Andhra Sugars Limited's CEO Compensation With the industry

According to our data, The Andhra Sugars Limited has a market capitalization of ₹8.2b, and paid its CEO total annual compensation worth ₹68m over the year to March 2020. We note that's a decrease of 19% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹4.6m.

For comparison, other companies in the industry with market capitalizations below ₹14b, reported a median total CEO compensation of ₹6.3m. Accordingly, our analysis reveals that The Andhra Sugars Limited pays Pendyala Chowdary north of the industry median. Furthermore, Pendyala Chowdary directly owns ₹1.3b worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Andhra Sugars sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at The Andhra Sugars Limited's Growth Numbers

The Andhra Sugars Limited has seen its earnings per share (EPS) increase by 9.3% a year over the past three years. It saw its revenue drop 1.7% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 The Andhra Sugars Limited Been A Good Investment?

With a three year total loss of 28% for the shareholders, The Andhra Sugars Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we noted earlier, Andhra Sugars pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for Andhra Sugars, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look good when you see that Pendyala is earning more than the industry median. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Andhra Sugars that investors should be aware of in a dynamic business environment.

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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