Most Shareholders Will Probably Agree With Genus Paper & Boards Limited's (NSE:GENUSPAPER) CEO Compensation

Key Insights

• Genus Paper & Boards will host its Annual General Meeting on 23rd of September
• CEO Kailash Agarwal's total compensation includes salary of ₹6.72m
• Total compensation is similar to the industry average
• Genus Paper & Boards' total shareholder return over the past three years was 177% while its EPS was down 23% over the past three years

The share price of Genus Paper & Boards Limited (NSE:GENUSPAPER) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 23rd of September may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Genus Paper & Boards

Comparing Genus Paper & Boards Limited's CEO Compensation With The Industry

According to our data, Genus Paper & Boards Limited has a market capitalization of ₹6.7b, and paid its CEO total annual compensation worth ₹7.4m over the year to March 2024. This was the same as last year. In particular, the salary of ₹6.72m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Indian Forestry industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹5.9m. This suggests that Genus Paper & Boards remunerates its CEO largely in line with the industry average. Furthermore, Kailash Agarwal directly owns ₹401m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹6.7m	₹6.7m	91%
Other	₹650k	₹650k	9%
Total Compensation	₹7.4m	₹7.4m	100%

Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 10% of the pie. Although there is a difference in how total compensation is set, Genus Paper & Boards more or less reflects the market in terms of setting the salary. 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.

Genus Paper & Boards Limited's Growth

Genus Paper & Boards Limited has reduced its earnings per share by 23% a year over the last three years. It achieved revenue growth of 3.2% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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?

Most shareholders would probably be pleased with Genus Paper & Boards Limited for providing a total return of 177% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 3 warning signs for Genus Paper & Boards (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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.