A Look At Shree Rama Newsprint's (NSE:RAMANEWS) CEO Remuneration

The CEO of Shree Rama Newsprint Limited (NSE:RAMANEWS) is Siddharth Chowdhary, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Shree Rama Newsprint

Comparing Shree Rama Newsprint Limited's CEO Compensation With the industry

Our data indicates that Shree Rama Newsprint Limited has a market capitalization of ₹2.4b, and total annual CEO compensation was reported as ₹8.0m for the year to March 2020. We note that's an increase of 14% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹8.0m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹7.3m. So it looks like Shree Rama Newsprint compensates Siddharth Chowdhary in line with the median for the industry.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Speaking on a company level, Shree Rama Newsprint prefers to tread along a traditional path, disbursing all compensation through a 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.

A Look at Shree Rama Newsprint Limited's Growth Numbers

Shree Rama Newsprint Limited has reduced its earnings per share by 36% a year over the last three years. It saw its revenue drop 32% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Shree Rama Newsprint Limited Been A Good Investment?

Since shareholders would have lost about 56% over three years, some Shree Rama Newsprint Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Shree Rama Newsprint rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Siddharth is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

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 Shree Rama Newsprint you should be aware of, and 2 of them make us uncomfortable.

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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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