Here's What We Learned About The CEO Pay At Seshasayee Paper and Boards Limited (NSE:SESHAPAPER)

This article will reflect on the compensation paid to Kallidaikurichi Kasi Viswanathan who has served as CEO of Seshasayee Paper and Boards Limited (NSE:SESHAPAPER) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Seshasayee Paper and Boards

Comparing Seshasayee Paper and Boards Limited's CEO Compensation With the industry

According to our data, Seshasayee Paper and Boards Limited has a market capitalization of ₹8.9b, and paid its CEO total annual compensation worth ₹17m over the year to March 2020. Notably, that's a decrease of 9.4% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹6.8m.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹7.3m. Accordingly, our analysis reveals that Seshasayee Paper and Boards Limited pays Kallidaikurichi Kasi Viswanathan north of the industry median. Furthermore, Kallidaikurichi Kasi Viswanathan directly owns ₹408k worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 89% of total compensation represents salary and 11% is other remuneration. Seshasayee Paper and Boards sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Seshasayee Paper and Boards Limited's Growth Numbers

Over the last three years, Seshasayee Paper and Boards Limited has shrunk its earnings per share by 9.7% per year. In the last year, its revenue is down 36%.

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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Seshasayee Paper and Boards Limited Been A Good Investment?

With a three year total loss of 13% for the shareholders, Seshasayee Paper and Boards Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Seshasayee Paper and Boards Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Seshasayee Paper and Boards that investors should think about before committing capital to this stock.

Important note: Seshasayee Paper and Boards 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. 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.
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