We Discuss Why Jagran Prakashan Limited's (NSE:JAGRAN) CEO Compensation May Be Closely Reviewed

Jagran Prakashan Limited (NSE:JAGRAN) has not performed well recently and CEO Sanjay Gupta will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 24 September 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Jagran Prakashan

How Does Total Compensation For Sanjay Gupta Compare With Other Companies In The Industry?

Our data indicates that Jagran Prakashan Limited has a market capitalization of ₹17b, and total annual CEO compensation was reported as ₹26m for the year to March 2021. Notably, that's a decrease of 17% over the year before. We note that the salary portion, which stands at ₹24.5m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between ₹7.4b and ₹29b, we discovered that the median CEO total compensation of that group was ₹25m. From this we gather that Sanjay Gupta is paid around the median for CEOs in the industry. Moreover, Sanjay Gupta also holds ₹3.3m worth of Jagran Prakashan 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	₹24m	₹29m	96%
Other	₹1.1m	₹2.1m	4%
Total Compensation	₹26m	₹31m	100%

Speaking on an industry level, nearly 99% of total compensation represents salary, while the remainder of 1% is other remuneration. Jagran Prakashan has gone down a largely traditional route, paying Sanjay Gupta a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Jagran Prakashan Limited's Growth

Over the last three years, Jagran Prakashan Limited has shrunk its earnings per share by 37% per year. It saw its revenue drop 20% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Jagran Prakashan Limited Been A Good Investment?

With a total shareholder return of -43% over three years, Jagran Prakashan Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Jagran Prakashan pays its CEO a majority of compensation through a salary. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

Whatever your view on compensation, you might want to check if insiders are buying or selling Jagran Prakashan shares (free trial).

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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.
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