How Should Investors React To Bannari Amman Sugars Limited's (NSE:BANARISUG) CEO Pay?
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In 2010 B. Saravanan was appointed CEO of Bannari Amman Sugars Limited (NSE:BANARISUG). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Bannari Amman Sugars
How Does B. Saravanan's Compensation Compare With Similar Sized Companies?
According to our data, Bannari Amman Sugars Limited has a market capitalization of ₹18b, and pays its CEO total annual compensation worth ₹44m. (This is based on the year to March 2018). We think total compensation is more important but we note that the CEO salary is lower, at ₹4.1m. We looked at a group of companies with market capitalizations from ₹6.9b to ₹27b, and the median CEO total compensation was ₹17m.
Thus we can conclude that B. Saravanan receives more in total compensation than the median of a group of companies in the same market, and of similar size to Bannari Amman Sugars Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Bannari Amman Sugars has changed from year to year.
Is Bannari Amman Sugars Limited Growing?
Over the last three years Bannari Amman Sugars Limited has shrunk its earnings per share by an average of 18% per year (measured with a line of best fit). Its revenue is down -24% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Bannari Amman Sugars Limited Been A Good Investment?
With a three year total loss of 29%, Bannari Amman Sugars Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared total CEO remuneration at Bannari Amman Sugars Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Just as bad, share price gains for investors have failed to materialize, over the same period. Some might well form the view that the CEO is paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Bannari Amman Sugars shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
