Chayan Chakrabarty has been the CEO of Bengal Energy Ltd. (TSE:BNG) since 2010. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Chayan Chakrabarty’s Compensation Compare With Similar Sized Companies?
According to our data, Bengal Energy Ltd. has a market capitalization of CA$12m, and pays its CEO total annual compensation worth CA$272k. (This figure is for the year to 2018). While we always look at total compensation first, we note that the salary component is less, at CA$230k. We examined a group of similar sized companies, with market capitalizations of below CA$267m. The median CEO compensation in that group is CA$157k.
It would therefore appear that Bengal Energy Ltd. pays Chayan Chakrabarty more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. Take a look at Bengal Energy’s growth trajectory by checking out this more detailed historical graph of earnings, revenue and cash flow.
The graphic below shows how CEO compensation at Bengal Energy has changed from year to year.
Is Bengal Energy Ltd. Growing?
Bengal Energy Ltd. has increased its earnings per share (EPS) by an average of 1.8% a year, over the last three years Its revenue is up 26% over last year.
It’s great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. I wouldn’t say this is necessarily top notch growth, but it is certainly promising.
Has Bengal Energy Ltd. Been A Good Investment?
Since shareholders would have lost about 4.2% over three years, some Bengal Energy Ltd. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared total CEO remuneration at Bengal Energy Ltd. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we’d stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. So you may want to check if insiders are buying Bengal Energy shares with their own money (free access).
If you want to buy a stock that is better than Bengal Energy, this free list of high return, low debt companies is a great place to look.
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