Shareholders Will Probably Not Have Any Issues With Sagar Cements Limited's (NSE:SAGCEM) CEO Compensation

Key Insights

• Sagar Cements will host its Annual General Meeting on 26th of June
• Salary of ₹18.0m is part of CEO Anand Sammidi's total remuneration
• The overall pay is comparable to the industry average
• Sagar Cements' total shareholder return over the past three years was 17% while its EPS was down 94% over the past three years

The share price of Sagar Cements Limited (NSE:SAGCEM) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 26th of June. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for Sagar Cements

Comparing Sagar Cements Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Sagar Cements Limited has a market capitalization of ₹33b, and reported total annual CEO compensation of ₹37m for the year to March 2024. Notably, that's a decrease of 37% over the year before. 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 ₹17b to ₹67b, we found that the median CEO total compensation was ₹30m. From this we gather that Anand Sammidi is paid around the median for CEOs in the industry. What's more, Anand Sammidi holds ₹3.8b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹18m	₹18m	48%
Other	₹19m	₹41m	52%
Total Compensation	₹37m	₹59m	100%

On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. In Sagar Cements' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Sagar Cements Limited's Growth Numbers

Over the last three years, Sagar Cements Limited has shrunk its earnings per share by 94% per year. It achieved revenue growth of 12% over the last year.

Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Sagar Cements Limited Been A Good Investment?

Sagar Cements Limited has served shareholders reasonably well, with a total return of 17% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Sagar Cements (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Sagar Cements, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com