A Quick Analysis On Southern Petrochemical Industries' (NSE:SPIC) CEO Compensation

Sllaipillayarputhur Ramakrishnan is the CEO of Southern Petrochemical Industries Corporation Limited (NSE:SPIC), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Southern Petrochemical Industries.

Check out our latest analysis for Southern Petrochemical Industries

How Does Total Compensation For Sllaipillayarputhur Ramakrishnan Compare With Other Companies In The Industry?

Our data indicates that Southern Petrochemical Industries Corporation Limited has a market capitalization of ₹5.1b, and total annual CEO compensation was reported as ₹7.1m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at ₹5.05m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below ₹14b, reported a median total CEO compensation of ₹6.4m. So it looks like Southern Petrochemical Industries compensates Sllaipillayarputhur Ramakrishnan in line with the median for the industry.

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Southern Petrochemical Industries pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Southern Petrochemical Industries Corporation Limited's Growth

Over the past three years, Southern Petrochemical Industries Corporation Limited has seen its earnings per share (EPS) grow by 14% per year. Its revenue is down 16% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. 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 Southern Petrochemical Industries Corporation Limited Been A Good Investment?

Since shareholders would have lost about 24% over three years, some Southern Petrochemical Industries Corporation Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, Southern Petrochemical Industries pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. But on the bright side, EPS growth is positive over the same period. Overall, we wouldn't say Sllaipillayarputhur is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

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 2 warning signs for Southern Petrochemical Industries that you should be aware of before investing.

Important note: Southern Petrochemical Industries 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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