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Is Dalmia Bharat Sugar and Industries Limited's (NSE:DALMIASUG) CEO Pay Fair?

Simply Wall St

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Gautam Dalmia is the CEO of Dalmia Bharat Sugar and Industries Limited (NSE:DALMIASUG). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Dalmia Bharat Sugar and Industries

How Does Gautam Dalmia's Compensation Compare With Similar Sized Companies?

Our data indicates that Dalmia Bharat Sugar and Industries Limited is worth ₹8.5b, and total annual CEO compensation is ₹45m. (This is based on the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at ₹40m. We took a group of companies with market capitalizations below ₹14b, and calculated the median CEO total compensation to be ₹1.3m.

Thus we can conclude that Gautam Dalmia receives more in total compensation than the median of a group of companies in the same market, and of similar size to Dalmia Bharat Sugar and Industries Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Dalmia Bharat Sugar and Industries has changed from year to year.

NSEI:DALMIASUG CEO Compensation, June 18th 2019

Is Dalmia Bharat Sugar and Industries Limited Growing?

Dalmia Bharat Sugar and Industries Limited has increased its earnings per share (EPS) by an average of 21% a year, over the last three years (using a line of best fit). In the last year, its revenue is down -9.9%.

This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Dalmia Bharat Sugar and Industries Limited Been A Good Investment?

With a three year total loss of 8.3%, Dalmia Bharat Sugar and Industries Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by Dalmia Bharat Sugar and Industries Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Dalmia Bharat Sugar and Industries insiders are buying or selling shares.

If you want to buy a stock that is better than Dalmia Bharat Sugar and Industries, this free list of high return, low debt companies is a great place to look.

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.