Shareholders May Be More Conservative With The Ramco Cements Limited's (NSE:RAMCOCEM) CEO Compensation For Now

Key Insights

• Ramco Cements to hold its Annual General Meeting on 13th of August
• CEO Arrakundal Velayutha Dharmakrishnan's total compensation includes salary of ₹187.9m
• The overall pay is 370% above the industry average
• Ramco Cements' total shareholder return over the past three years was 53% while its EPS was down 33% over the past three years

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The share price of The Ramco Cements Limited (NSE:RAMCOCEM) 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 13th of August may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. 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.

See our latest analysis for Ramco Cements

Comparing The Ramco Cements Limited's CEO Compensation With The Industry

Our data indicates that The Ramco Cements Limited has a market capitalization of ₹272b, and total annual CEO compensation was reported as ₹188m for the year to March 2025. That's a fairly small increase of 3.7% over the previous year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹188m.

On comparing similar companies from the Indian Basic Materials industry with market caps ranging from ₹175b to ₹562b, we found that the median CEO total compensation was ₹40m. Hence, we can conclude that Arrakundal Velayutha Dharmakrishnan is remunerated higher than the industry median.

Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. Speaking on a company level, Ramco Cements prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at The Ramco Cements Limited's Growth Numbers

The Ramco Cements Limited has reduced its earnings per share by 33% a year over the last three years. It saw its revenue drop 9.2% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The Ramco Cements Limited Been A Good Investment?

Most shareholders would probably be pleased with The Ramco Cements Limited for providing a total return of 53% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Ramco Cements rewards its CEO solely through a salary, ignoring non-salary benefits completely. Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with 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. That's why we did our research, and identified 2 warning signs for Ramco Cements (of which 1 can't be ignored!) 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.