Shareholders May Not Be So Generous With Deccan Cements Limited's (NSE:DECCANCE) CEO Compensation And Here's Why

CEO Penmetcha Parvathi has done a decent job of delivering relatively good performance at Deccan Cements Limited (NSE:DECCANCE) recently. As shareholders go into the upcoming AGM on 14 September 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Deccan Cements

Comparing Deccan Cements Limited's CEO Compensation With the industry

Our data indicates that Deccan Cements Limited has a market capitalization of ₹10b, and total annual CEO compensation was reported as ₹46m for the year to March 2021. That's a notable increase of 87% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹9.2m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹2.6m. Hence, we can conclude that Penmetcha Parvathi is remunerated higher than the industry median. Furthermore, Penmetcha Parvathi directly owns ₹44m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	₹9.2m	₹9.2m	20%
Other	₹36m	₹15m	80%
Total Compensation	₹46m	₹24m	100%

On an industry level, around 84% of total compensation represents salary and 16% is other remuneration. Deccan Cements pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Deccan Cements Limited's Growth

Deccan Cements Limited has seen its earnings per share (EPS) increase by 48% a year over the past three years. In the last year, its revenue is up 65%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Deccan Cements Limited Been A Good Investment?

Boasting a total shareholder return of 83% over three years, Deccan Cements Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Deccan Cements that investors should look into moving forward.

Important note: Deccan Cements 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.
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