It's Probably Less Likely That Bengal Energy Ltd.'s (TSE:BNG) CEO Will See A Huge Pay Rise This Year

In the past three years, shareholders of Bengal Energy Ltd. (TSE:BNG) have seen a loss on their investment. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 28 September 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Bengal Energy

How Does Total Compensation For Chayan Chakrabarty Compare With Other Companies In The Industry?

According to our data, Bengal Energy Ltd. has a market capitalization of CA$37m, and paid its CEO total annual compensation worth CA$283k over the year to March 2021. We note that's an increase of 23% above last year. In particular, the salary of CA$230.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under CA$256m, the reported median total CEO compensation was CA$240k. This suggests that Bengal Energy remunerates its CEO largely in line with the industry average. What's more, Chayan Chakrabarty holds CA$264k worth of shares in the company in their own name.

Component	2021	2020	Proportion (2021)
Salary	CA$230k	CA$230k	81%
Other	CA$53k	-	19%
Total Compensation	CA$283k	CA$230k	100%

On an industry level, around 51% of total compensation represents salary and 49% is other remuneration. According to our research, Bengal Energy has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Bengal Energy Ltd.'s Growth Numbers

Bengal Energy Ltd. has seen its earnings per share (EPS) increase by 102% a year over the past three years. It saw its revenue drop 23% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Bengal Energy Ltd. Been A Good Investment?

With a three year total loss of 15% for the shareholders, Bengal Energy Ltd. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 5 warning signs (and 1 which is a bit unpleasant) in Bengal Energy we think you should know about.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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