We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Ruchira Papers Limited's (NSE:RUCHIRA) CEO For Now

Key Insights

• Ruchira Papers to hold its Annual General Meeting on 29th of September
• Total pay for CEO Umesh Garg includes ₹23.0m salary
• The overall pay is 216% above the industry average
• Over the past three years, Ruchira Papers' EPS grew by 72% and over the past three years, the total shareholder return was 236%

CEO Umesh Garg has done a decent job of delivering relatively good performance at Ruchira Papers Limited (NSE:RUCHIRA) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 29th of September. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Ruchira Papers

How Does Total Compensation For Umesh Garg Compare With Other Companies In The Industry?

Our data indicates that Ruchira Papers Limited has a market capitalization of ₹4.3b, and total annual CEO compensation was reported as ₹23m for the year to March 2023. This was the same as last year. Notably, the salary of ₹23m is the entirety of the CEO compensation.

On comparing similar-sized companies in the Indian Forestry industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹7.3m. Hence, we can conclude that Umesh Garg is remunerated higher than the industry median. What's more, Umesh Garg holds ₹419m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	₹23m	₹23m	100%
Other	-	-	-
Total Compensation	₹23m	₹23m	100%

Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. On a company level, Ruchira Papers prefers to reward its CEO through a salary, opting not to pay Umesh Garg through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Ruchira Papers Limited's Growth

Ruchira Papers Limited has seen its earnings per share (EPS) increase by 72% a year over the past three years. In the last year, its revenue is up 13%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Ruchira Papers Limited Been A Good Investment?

Boasting a total shareholder return of 236% over three years, Ruchira Papers 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.

To Conclude...

Ruchira Papers pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Ruchira Papers that investors should be aware of in a dynamic business environment.

Important note: Ruchira Papers 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.