Here's What We Think About Bengal Energy's (TSE:BNG) CEO Pay

This article will reflect on the compensation paid to Chayan Chakrabarty who has served as CEO of Bengal Energy Ltd. (TSE:BNG) since 2010. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Bengal Energy

Comparing Bengal Energy Ltd.'s CEO Compensation With the industry

At the time of writing, our data shows that Bengal Energy Ltd. has a market capitalization of CA$3.6m, and reported total annual CEO compensation of CA$230k for the year to March 2020. This means that the compensation hasn't changed much from last year. Notably, the salary of CA$230k is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under CA$255m, the reported median total CEO compensation was CA$265k. So it looks like Bengal Energy compensates Chayan Chakrabarty in line with the median for the industry. Moreover, Chayan Chakrabarty also holds CA$109k worth of Bengal Energy stock directly under their own name.

Talking in terms of the industry, salary represented approximately 45% of total compensation out of all the companies we analyzed, while other remuneration made up 55% of the pie. On a company level, Bengal Energy prefers to reward its CEO through a salary, opting not to pay Chayan Chakrabarty through non-salary benefits. 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 Bengal Energy Ltd.'s Growth Numbers

Bengal Energy Ltd.'s earnings per share (EPS) grew 30% per year over the last three years. Its revenue is down 35% 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 Bengal Energy Ltd. Been A Good Investment?

Since shareholders would have lost about 61% over three years, some Bengal Energy Ltd. investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Bengal Energy rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Bengal Energy pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Chayan is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Bengal Energy (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.

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.

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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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