We Discuss Whether Rashtriya Chemicals and Fertilizers Limited's (NSE:RCF) CEO Is Due For A Pay Rise

Key Insights

• Rashtriya Chemicals and Fertilizers to hold its Annual General Meeting on 23 December 2022
• CEO Shriniwas Mudgerikar's total compensation includes salary of ₹6.71m
• Total compensation is 77% below industry average
• Rashtriya Chemicals and Fertilizers' EPS grew by 124% over the past three years while total shareholder return over the past three years was 256%

The impressive results at Rashtriya Chemicals and Fertilizers Limited (NSE:RCF) recently will be great news for shareholders. At the upcoming AGM on 23 December 2022, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

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 ₹76b, and paid its CEO total annual compensation worth ₹7.3m over the year to March 2022. Notably, that's an increase of 30% over the year before. In particular, the salary of ₹6.71m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar companies from the Indian Chemicals industry with market caps ranging from ₹33b to ₹132b, we found that the median CEO total compensation was ₹32m. In other words, Rashtriya Chemicals and Fertilizers pays its CEO lower than the industry median.

Component	2022	2021	Proportion (2022)
Salary	₹6.7m	₹5.0m	91%
Other	₹629k	₹600k	9%
Total Compensation	₹7.3m	₹5.6m	100%

Speaking on an industry level, nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. Although there is a difference in how total compensation is set, Rashtriya Chemicals and Fertilizers more or less reflects the market in terms of setting the 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 Rashtriya Chemicals and Fertilizers Limited's Growth Numbers

Over the past three years, Rashtriya Chemicals and Fertilizers Limited has seen its earnings per share (EPS) grow by 124% per year. In the last year, its revenue is up 96%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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?

Boasting a total shareholder return of 256% over three years, Rashtriya Chemicals and Fertilizers Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which are a bit concerning) in Rashtriya Chemicals and Fertilizers we think you should know about.

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.