Here's Why We Think Rashtriya Chemicals and Fertilizers Limited's (NSE:RCF) CEO Compensation Looks Fair

Key Insights

• Rashtriya Chemicals and Fertilizers will host its Annual General Meeting on 17th of October
• Total pay for CEO Shriniwas Mudgerikar includes ₹5.80m salary
• Total compensation is 77% below industry average
• Over the past three years, Rashtriya Chemicals and Fertilizers' EPS fell by 28% and over the past three years, the total shareholder return was 69%

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Shareholders may be wondering what CEO Shriniwas Mudgerikar plans to do to improve the less than great performance at Rashtriya Chemicals and Fertilizers Limited (NSE:RCF) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 17th of October. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for Rashtriya Chemicals and Fertilizers

How Does Total Compensation For Shriniwas Mudgerikar Compare With Other Companies In The Industry?

According to our data, Rashtriya Chemicals and Fertilizers Limited has a market capitalization of ₹81b, and paid its CEO total annual compensation worth ₹8.4m over the year to March 2025. Notably, that's a decrease of 26% over the year before. We note that the salary portion, which stands at ₹5.80m constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Indian Chemicals industry with market capitalizations ranging from ₹35b to ₹142b, the reported median CEO total compensation was ₹36m. This suggests that Shriniwas Mudgerikar is paid below the industry median.

On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. Rashtriya Chemicals and Fertilizers pays a modest slice of remuneration through salary, as compared to the broader 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 Rashtriya Chemicals and Fertilizers Limited's Growth Numbers

Over the last three years, Rashtriya Chemicals and Fertilizers Limited has shrunk its earnings per share by 28% per year. Its revenue is down 8.2% over the previous year.

Overall this is not a very positive result for shareholders. 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. 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 Rashtriya Chemicals and Fertilizers Limited Been A Good Investment?

We think that the total shareholder return of 69%, over three years, would leave most Rashtriya Chemicals and Fertilizers Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us wonder if these strong returns can continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Rashtriya Chemicals and Fertilizers you should be aware of, and 1 of them doesn't sit too well with us.

Important note: Rashtriya Chemicals and Fertilizers is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.