Shareholders May Not Be So Generous With Dhanuka Agritech Limited's (NSE:DHANUKA) CEO Compensation And Here's Why
Under the guidance of CEO Mahendra Dhanuka, Dhanuka Agritech Limited (NSE:DHANUKA) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 29 July 2021. However, some shareholders will still be cautious of paying the CEO excessively.
View our latest analysis for Dhanuka Agritech
How Does Total Compensation For Mahendra Dhanuka Compare With Other Companies In The Industry?
Our data indicates that Dhanuka Agritech Limited has a market capitalization of ₹47b, and total annual CEO compensation was reported as ₹61m for the year to March 2021. We note that's an increase of 33% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹23m.
On comparing similar companies from the same industry with market caps ranging from ₹30b to ₹119b, we found that the median CEO total compensation was ₹31m. This suggests that Mahendra Dhanuka is paid more than the median for the industry. Furthermore, Mahendra Dhanuka directly owns ₹233m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2021 | 2020 | Proportion (2021) |
| Salary | ₹23m | ₹21m | 37% |
| Other | ₹38m | ₹25m | 63% |
| Total Compensation | ₹61m | ₹46m | 100% |
On an industry level, around 88% of total compensation represents salary and 12% is other remuneration. Dhanuka Agritech sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Dhanuka Agritech Limited's Growth
Over the past three years, Dhanuka Agritech Limited has seen its earnings per share (EPS) grow by 20% per year. In the last year, its revenue is up 24%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Dhanuka Agritech Limited Been A Good Investment?
Most shareholders would probably be pleased with Dhanuka Agritech Limited for providing a total return of 94% over three years. 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...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Dhanuka Agritech that you should be aware of before investing.
Switching gears from Dhanuka Agritech, 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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About NSEI:DHANUKA
Solid track record with excellent balance sheet and pays a dividend.
