Should Shareholders Reconsider Emami Paper Mills Limited's (NSE:EMAMIPAP) CEO Compensation Package?

Key Insights

• Emami Paper Mills will host its Annual General Meeting on 3rd of September
• Total pay for CEO Vivek Chawla includes ₹26.6m salary
• Total compensation is 775% above industry average
• Emami Paper Mills' three-year loss to shareholders was 36% while its EPS was down 47% over the past three years

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The results at Emami Paper Mills Limited (NSE:EMAMIPAP) have been quite disappointing recently and CEO Vivek Chawla bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 3rd of September. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Emami Paper Mills

How Does Total Compensation For Vivek Chawla Compare With Other Companies In The Industry?

According to our data, Emami Paper Mills Limited has a market capitalization of ₹6.6b, and paid its CEO total annual compensation worth ₹65m over the year to March 2025. That's a slight decrease of 6.1% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹27m.

On comparing similar-sized companies in the Indian Forestry industry with market capitalizations below ₹18b, we found that the median total CEO compensation was ₹7.4m. Accordingly, our analysis reveals that Emami Paper Mills Limited pays Vivek Chawla north of the industry median.

On an industry level, around 91% of total compensation represents salary and 9% is other remuneration. It's interesting to note that Emami Paper Mills allocates a smaller portion of compensation to salary 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.

Emami Paper Mills Limited's Growth

Over the last three years, Emami Paper Mills Limited has shrunk its earnings per share by 47% per year. In the last year, its revenue is down 3.8%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Emami Paper Mills Limited Been A Good Investment?

Few Emami Paper Mills Limited shareholders would feel satisfied with the return of -36% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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. That's why we did our research, and identified 5 warning signs for Emami Paper Mills (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: Emami Paper 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.