Here's Why Shareholders May Want To Be Cautious With Increasing Star Paper Mills Limited's (NSE:STARPAPER) CEO Pay Packet

Key Insights

• Star Paper Mills' Annual General Meeting to take place on 22nd of September
• CEO Madhukar Mishra's total compensation includes salary of ₹35.9m
• Total compensation is 457% above industry average
• Over the past three years, Star Paper Mills' EPS grew by 44% and over the past three years, the total shareholder return was 152%

Under the guidance of CEO Madhukar Mishra, Star Paper Mills Limited (NSE:STARPAPER) has performed reasonably well recently. As shareholders go into the upcoming AGM on 22nd of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Star Paper Mills

How Does Total Compensation For Madhukar Mishra Compare With Other Companies In The Industry?

Our data indicates that Star Paper Mills Limited has a market capitalization of ₹3.6b, and total annual CEO compensation was reported as ₹41m for the year to March 2023. Notably, that's an increase of 22% over the year before. We note that the salary portion, which stands at ₹35.9m constitutes the majority of total compensation received by the CEO.

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. This suggests that Madhukar Mishra is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	₹36m	₹29m	88%
Other	₹4.9m	₹4.6m	12%
Total Compensation	₹41m	₹34m	100%

On an industry level, around 87% of total compensation represents salary and 13% is other remuneration. Our data reveals that Star Paper Mills allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Star Paper Mills Limited's Growth

Over the past three years, Star Paper Mills Limited has seen its earnings per share (EPS) grow by 44% per year. In the last year, its revenue is up 24%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Star Paper Mills Limited Been A Good Investment?

We think that the total shareholder return of 152%, over three years, would leave most Star Paper Mills Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Star Paper Mills that investors should think about before committing capital to this stock.

Switching gears from Star Paper Mills, 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.

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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.