Increases to Bharat Bijlee Limited's (NSE:BBL) CEO Compensation Might Cool off for now

Key Insights

• Bharat Bijlee's Annual General Meeting to take place on 29th of August
• CEO Nakul Mehta's total compensation includes salary of ₹8.40m
• The total compensation is 462% higher than the average for the industry
• Over the past three years, Bharat Bijlee's EPS grew by 39% and over the past three years, the total shareholder return was 663%

CEO Nakul Mehta has done a decent job of delivering relatively good performance at Bharat Bijlee Limited (NSE:BBL) recently. As shareholders go into the upcoming AGM on 29th of August, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

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 ₹54b, and paid its CEO total annual compensation worth ₹111m over the year to March 2024. Notably, that's an increase of 53% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹8.4m.

For comparison, other companies in the Indian Electrical industry with market capitalizations ranging between ₹34b and ₹134b had a median total CEO compensation of ₹20m. Hence, we can conclude that Nakul Mehta is remunerated higher than the industry median. Moreover, Nakul Mehta also holds ₹3.1b worth of Bharat Bijlee stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹8.4m	₹8.4m	8%
Other	₹103m	₹65m	92%
Total Compensation	₹111m	₹73m	100%

On an industry level, around 84% of total compensation represents salary and 16% is other remuneration. In Bharat Bijlee's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Bharat Bijlee Limited's Growth Numbers

Bharat Bijlee Limited's earnings per share (EPS) grew 39% per year over the last three years. Its revenue is up 14% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Bharat Bijlee Limited Been A Good Investment?

Boasting a total shareholder return of 663% over three years, Bharat Bijlee Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Bharat Bijlee that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.