We Think Orient Paper & Industries Limited's (NSE:ORIENTPPR) CEO Compensation Package Needs To Be Put Under A Microscope

The results at Orient Paper & Industries Limited (NSE:ORIENTPPR) have been quite disappointing recently and CEO Manohar Pachisia 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 27 August 2021. 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.

Check out our latest analysis for Orient Paper & Industries

Comparing Orient Paper & Industries Limited's CEO Compensation With the industry

Our data indicates that Orient Paper & Industries Limited has a market capitalization of ₹5.9b, and total annual CEO compensation was reported as ₹34m for the year to March 2021. We note that's a decrease of 17% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹15m.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹7.7m. Hence, we can conclude that Manohar Pachisia is remunerated higher than the industry median. What's more, Manohar Pachisia holds ₹1.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹15m	₹15m	45%
Other	₹19m	₹26m	55%
Total Compensation	₹34m	₹41m	100%

Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Orient Paper & Industries sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Orient Paper & Industries Limited's Growth Numbers

Over the last three years, Orient Paper & Industries Limited has shrunk its earnings per share by 93% per year. Its revenue is down 16% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Orient Paper & Industries Limited Been A Good Investment?

With a total shareholder return of -32% over three years, Orient Paper & Industries Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. 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.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which is potentially serious) in Orient Paper & Industries we think you should know about.

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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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