Shareholders May Be Wary Of Increasing RHI Magnesita India Limited's (NSE:RHIM) CEO Compensation Package

Key Insights

• RHI Magnesita India will host its Annual General Meeting on 26th of September
• Salary of ₹18.4m is part of CEO Parmod Sagar's total remuneration
• Total compensation is similar to the industry average
• RHI Magnesita India's EPS declined by 25% over the past three years while total shareholder loss over the past three years was 27%

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Shareholders will probably not be too impressed with the underwhelming results at RHI Magnesita India Limited (NSE:RHIM) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 26th of September. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for RHI Magnesita India

How Does Total Compensation For Parmod Sagar Compare With Other Companies In The Industry?

At the time of writing, our data shows that RHI Magnesita India Limited has a market capitalization of ₹100b, and reported total annual CEO compensation of ₹58m for the year to March 2025. That's just a smallish increase of 3.6% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹18m.

On comparing similar companies from the Indian Basic Materials industry with market caps ranging from ₹35b to ₹141b, we found that the median CEO total compensation was ₹63m. This suggests that RHI Magnesita India remunerates its CEO largely in line with the industry average.

On an industry level, around 91% of total compensation represents salary and 9% is other remuneration. In RHI Magnesita India's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at RHI Magnesita India Limited's Growth Numbers

Over the last three years, RHI Magnesita India Limited has shrunk its earnings per share by 25% per year. Revenue was pretty flat on last year.

Few shareholders would be pleased to read that EPS have declined. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has RHI Magnesita India Limited Been A Good Investment?

Since shareholders would have lost about 27% over three years, some RHI Magnesita India Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at RHI Magnesita India.

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.