How Much Is Bharat Gears Limited (NSE:BHARATGEAR) Paying Its CEO?

SPK Kanwar has been the CEO of Bharat Gears Limited (NSE:BHARATGEAR) since 2002, and this article will examine the executive's compensation with respect to the overall performance of the company. 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 Bharat Gears

How Does Total Compensation For SPK Kanwar Compare With Other Companies In The Industry?

At the time of writing, our data shows that Bharat Gears Limited has a market capitalization of ₹630m, and reported total annual CEO compensation of ₹26m for the year to March 2020. Notably, that's an increase of 33% over the year before. Notably, the salary which is ₹20.0m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹10m. Hence, we can conclude that SPK Kanwar is remunerated higher than the industry median. Moreover, SPK Kanwar also holds ₹228m worth of Bharat Gears stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. There isn't a significant difference between Bharat Gears and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Bharat Gears Limited's Growth

Bharat Gears Limited has reduced its earnings per share by 98% a year over the last three years. It saw its revenue drop 28% over the last year.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Bharat Gears Limited Been A Good Investment?

Given the total shareholder loss of 65% over three years, many shareholders in Bharat Gears Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Bharat Gears pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Bharat Gears you should be aware of, and 2 of them are a bit concerning.

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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