In the past three years, the share price of Genus Paper & Boards Limited (NSE:GENUSPAPER) has struggled to generate growth for its shareholders. Per share earnings growth is also poor, despite revenues growing. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 18 September 2021, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.
Comparing Genus Paper & Boards Limited's CEO Compensation With the industry
According to our data, Genus Paper & Boards Limited has a market capitalization of ₹2.5b, and paid its CEO total annual compensation worth ₹7.4m over the year to March 2021. That is, the compensation was roughly the same as last year. Notably, the salary which is ₹6.72m, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹7.6m. So it looks like Genus Paper & Boards compensates Kailash Agarwal in line with the median for the industry. Moreover, Kailash Agarwal also holds ₹148m worth of Genus Paper & Boards stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. Genus Paper & Boards is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Genus Paper & Boards Limited's Growth Numbers
Genus Paper & Boards Limited has reduced its earnings per share by 2.7% a year over the last three years. In the last year, its revenue is up 61%.
The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Genus Paper & Boards Limited Been A Good Investment?
Given the total shareholder loss of 14% over three years, many shareholders in Genus Paper & Boards Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Genus Paper & Boards you should be aware of, and 1 of them can't be ignored.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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