The Supreme Industries Limited's (NSE:SUPREMEIND) CEO Compensation Is Looking A Bit Stretched At The Moment

Performance at The Supreme Industries Limited (NSE:SUPREMEIND) has been reasonably good and CEO Mahaveer Prasad Taparia has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 29 June 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Supreme Industries

How Does Total Compensation For Mahaveer Prasad Taparia Compare With Other Companies In The Industry?

According to our data, The Supreme Industries Limited has a market capitalization of ₹274b, and paid its CEO total annual compensation worth ₹146m over the year to March 2021. That's a notable increase of 47% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹34m.

For comparison, other companies in the same industry with market capitalizations ranging between ₹149b and ₹476b had a median total CEO compensation of ₹65m. This suggests that Mahaveer Prasad Taparia is paid more than the median for the industry. Moreover, Mahaveer Prasad Taparia also holds ₹1.6b worth of Supreme Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	₹34m	₹33m	23%
Other	₹112m	₹66m	77%
Total Compensation	₹146m	₹99m	100%

On an industry level, roughly 89% of total compensation represents salary and 11% is other remuneration. Supreme Industries 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 The Supreme Industries Limited's Growth Numbers

Over the past three years, The Supreme Industries Limited has seen its earnings per share (EPS) grow by 31% per year. In the last year, its revenue is up 15%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The Supreme Industries Limited Been A Good Investment?

Most shareholders would probably be pleased with The Supreme Industries Limited for providing a total return of 94% over three years. 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.

To Conclude...

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. 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.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Supreme Industries that you should be aware of before investing.

Important note: Supreme 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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