It Looks Like Shareholders Would Probably Approve Bharat Dynamics Limited's (NSE:BDL) CEO Compensation Package

We have been pretty impressed with the performance at Bharat Dynamics Limited (NSE:BDL) recently and CEO Siddharth Mishra deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 26 September 2022. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Bharat Dynamics

Comparing Bharat Dynamics Limited's CEO Compensation With The Industry

According to our data, Bharat Dynamics Limited has a market capitalization of ₹171b, and paid its CEO total annual compensation worth ₹7.9m over the year to March 2022. That's a notable increase of 43% on last year. Notably, the salary which is ₹4.14m, represents a considerable chunk of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between ₹80b and ₹255b, we discovered that the median CEO total compensation of that group was ₹7.9m. So it looks like Bharat Dynamics compensates Siddharth Mishra in line with the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	₹4.1m	₹3.8m	53%
Other	₹3.7m	₹1.7m	47%
Total Compensation	₹7.9m	₹5.5m	100%

Talking in terms of the industry, salary represented approximately 79% of total compensation out of all the companies we analyzed, while other remuneration made up 21% of the pie. It's interesting to note that Bharat Dynamics allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Bharat Dynamics Limited's Growth

Over the past three years, Bharat Dynamics Limited has seen its earnings per share (EPS) grow by 11% per year. Its revenue is up 69% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Dynamics Limited Been A Good Investment?

Boasting a total shareholder return of 230% over three years, Bharat Dynamics 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.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Bharat Dynamics you should be aware of, and 1 of them is potentially serious.

Switching gears from Bharat Dynamics, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.