What Can We Learn About Dhanuka Agritech's (NSE:DHANUKA) CEO Compensation?

The CEO of Dhanuka Agritech Limited (NSE:DHANUKA) is Mahendra Dhanuka, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Dhanuka Agritech pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Dhanuka Agritech

Comparing Dhanuka Agritech Limited's CEO Compensation With the industry

Our data indicates that Dhanuka Agritech Limited has a market capitalization of ₹34b, and total annual CEO compensation was reported as ₹46m for the year to March 2020. We note that's an increase of 8.4% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹21m.

In comparison with other companies in the industry with market capitalizations ranging from ₹15b to ₹59b, the reported median CEO total compensation was ₹18m. Hence, we can conclude that Mahendra Dhanuka is remunerated higher than the industry median. Moreover, Mahendra Dhanuka also holds ₹172m worth of Dhanuka Agritech stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Dhanuka Agritech 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.

A Look at Dhanuka Agritech Limited's Growth Numbers

Dhanuka Agritech Limited's earnings per share (EPS) grew 18% per year over the last three years. Its revenue is up 28% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Dhanuka Agritech Limited Been A Good Investment?

With a total shareholder return of 4.1% over three years, Dhanuka Agritech Limited has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As previously discussed, Mahendra 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 over three years. We also think investor returns are steady over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't say CEO compensation problematic.

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 1 warning sign for Dhanuka Agritech that investors should think about before committing capital to this stock.

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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