How Much Is Johnson Controls-Hitachi Air Conditioning India Limited (NSE:JCHAC) CEO Getting Paid?

This article will reflect on the compensation paid to Gurmeet Singh who has served as CEO of Johnson Controls-Hitachi Air Conditioning India Limited (NSE:JCHAC) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Johnson Controls-Hitachi Air Conditioning India

How Does Total Compensation For Gurmeet Singh Compare With Other Companies In The Industry?

According to our data, Johnson Controls-Hitachi Air Conditioning India Limited has a market capitalization of ₹58b, and paid its CEO total annual compensation worth ₹19m over the year to March 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of ₹15.8m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₹29b and ₹118b had a median total CEO compensation of ₹30m. That is to say, Gurmeet Singh is paid under the industry median.

Speaking on an industry level, nearly 99% of total compensation represents salary, while the remainder of 1.3% is other remuneration. In Johnson Controls-Hitachi Air Conditioning India's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Johnson Controls-Hitachi Air Conditioning India Limited's Growth Numbers

Over the last three years, Johnson Controls-Hitachi Air Conditioning India Limited has shrunk its earnings per share by 7.8% per year. In the last year, its revenue is down 37%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Johnson Controls-Hitachi Air Conditioning India Limited Been A Good Investment?

With a total shareholder return of 10% over three years, Johnson Controls-Hitachi Air Conditioning India Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we noted earlier, Johnson Controls-Hitachi Air Conditioning India pays its CEO lower than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been unexciting, and EPS growth has fared even worse. It's tough for us to say that Gurmeet is earning a high compensation, but any bump in pay is unlikely at this stage since shareholders will likely hold off support until performance improves.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Johnson Controls-Hitachi Air Conditioning India.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

If you’re looking to trade Johnson Controls-Hitachi Air Conditioning India, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.