Maricos Saugata Gupta Loses Top Spot In FMCG CEO Pay Scale

Marico Ltd. Chief Executive Officer Saugata Gupta saw a 6% decline in his annual salary in the last financial year, causing him to fall to the second spot on the list of highest-paid CEOs in the fast-moving consumer goods sector.

He took home Rs 23.7 crore in a challenging year that was marked by a rural slowdown, input-cost volatility and stiff competition from local packaged goods peers. The remuneration includes fixed and variable pay, retiral benefits and performance incentives, according to its annual report. His pay package is 176 times the median pay of Marico employees.

Marico, however, raised the salary of employees, apart from the managerial personnel, by an average 4.5% in FY24, as per the annual report.

Gupta, who held the top spot for two consecutive years, has been replaced by Sanjiv Puri of ITC Ltd. Puri received a compensation package of Rs 25.2 crore in the last fiscal, a growth of 54% from fiscal 2023. This compares with Nestle India Ltd. Chairperson and Managing Director Suresh Narayanan's pay cheque of Rs 23.5 crore and Hindustan Unilever Ltd. CEO Rohit Jawa's Rs 22.4 crore, their annual reports showed.

Narayanan has seen a 33% year-on-year growth in salary in the last fiscal. Jawa took over from Sanjiv Mehta in June-end of 2023, implying this is his maiden annual compensation from the consumer goods giant.

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Other companies like Britannia Industries Ltd., Colgate-Palmolive (India) Ltd. and Godrej Consumer Products Ltd. are yet to release annual reports.

In fiscal 2023, ITC's Puri ranked fourth in the pecking order, taking home a total remuneration of Rs 16.3 crore. His rise to the top spot comes as a result of his conglomerate's strong performance and growth over the past year. With consolidated sales of Rs 17,195 crore, ITC surpassed Britannia Industries to become the second-largest listed packaged foods company by sales in fiscal 2024, behind Nestle India. In contrast, Britannia posted consolidated sales of Rs 16,769 crore, while Nestle India reported total sales of Rs 24,275 crore in the last fiscal, which encompassed a 15-month period following a shift in the company's financial reporting calendar.

For Marico, the fiscal gone by was marked with mixed results with volume growth consolidating at a low level, accompanied by a dip in revenue on the back of decline in commodity and consumer prices. The mass consumption categories particularly saw weaker-than-expected growth.

However, the worst is behind for the maker of Parachute hair oil and Saffola edible oil, according to analysts. "That's given early signs of rural revival, likely good rainfall and a 6% hike in Parachute taken in Apr-24 to pass on higher copra prices," Abneesh Roy, executive director at Nuvama Institutional Equities, said.

Rural demand, which has been a laggard for the consumer goods industry, is expected to revive in the ongoing fiscal with the onset of a likely strong monsoon. Marico's over 30% salience of rural will be a beneficiary of this revival in rural demand, Roy said. "Similarly, local competition, which was a pain point last year, will now be in the base and competition will cool off as raw material prices are stabilising."

The rise in the prices of copra, a key raw material, would also aid Marico's pricing growth ensuring better profitability.

The diversification strategy at Marico to reduce its dependence on Parachute coconut oil and Saffola edible oil — its two traditionally strong, commodity-linked brands — is yielding results. The Mumbai-based firm plans to double its foods portfolio in fiscal 2027 and expects the domestic revenue share from food and personal care to rise from 20% to 25%.

Marico's revenue fell 1% to Rs 9,653 crore in the last fiscal. Its net profit, excluding one-offs, rose 15% to Rs 1,470 crore.

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