We Think Some Shareholders May Hesitate To Increase Bharat Bijlee Limited's (NSE:BBL) CEO Compensation

Key Insights

• Bharat Bijlee to hold its Annual General Meeting on 14th of September
• Salary of ₹8.40m is part of CEO Nakul Mehta's total remuneration
• The overall pay is 451% above the industry average
• Bharat Bijlee's EPS grew by 52% over the past three years while total shareholder return over the past three years was 431%

Performance at Bharat Bijlee Limited (NSE:BBL) has been reasonably good and CEO Nakul Mehta has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 14th of September. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Bharat Bijlee

Comparing Bharat Bijlee Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Bharat Bijlee Limited has a market capitalization of ₹22b, and reported total annual CEO compensation of ₹73m for the year to March 2023. Notably, that's an increase of 51% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹8.4m.

For comparison, other companies in the Indian Electrical industry with market capitalizations ranging between ₹8.3b and ₹33b had a median total CEO compensation of ₹13m. Accordingly, our analysis reveals that Bharat Bijlee Limited pays Nakul Mehta north of the industry median. Moreover, Nakul Mehta also holds ₹1.3b 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	2023	2022	Proportion (2023)
Salary	₹8.4m	₹8.4m	11%
Other	₹65m	₹40m	89%
Total Compensation	₹73m	₹48m	100%

Speaking on an industry level, nearly 76% of total compensation represents salary, while the remainder of 24% is other remuneration. It's interesting to note that Bharat Bijlee allocates a smaller portion of compensation to salary 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.

Bharat Bijlee Limited's Growth

Bharat Bijlee Limited has seen its earnings per share (EPS) increase by 52% a year over the past three years. It achieved revenue growth of 26% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bharat Bijlee Limited Been A Good Investment?

Boasting a total shareholder return of 431% over three years, Bharat Bijlee Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Bharat Bijlee that investors should be aware of in a dynamic business environment.

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.