What We Learned About Bharat Bijlee's (NSE:BBL) CEO Pay

Nakul Mehta has been the CEO of Bharat Bijlee Limited (NSE:BBL) since 1990, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Bharat Bijlee pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Bharat Bijlee

How Does Total Compensation For Nakul Mehta Compare With Other Companies In The Industry?

According to our data, Bharat Bijlee Limited has a market capitalization of ₹3.8b, and paid its CEO total annual compensation worth ₹45m over the year to March 2020. That's a notable increase of 98% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹7.9m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹6.7m. This suggests that Nakul Mehta is paid more than the median for the industry. What's more, Nakul Mehta holds ₹202m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 9.1% is other remuneration. Bharat Bijlee pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Bharat Bijlee Limited's Growth

Bharat Bijlee Limited has seen its earnings per share (EPS) increase by 14% a year over the past three years. Its revenue is down 19% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bharat Bijlee Limited Been A Good Investment?

Given the total shareholder loss of 33% over three years, many shareholders in Bharat Bijlee Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we touched on above, Bharat Bijlee Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 3 warning signs for Bharat Bijlee that investors should be aware of in a dynamic business environment.

Important note: Bharat Bijlee is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.
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