Shareholders May Not Be So Generous With Beardsell Limited's (NSE:BEARDSELL) CEO Compensation And Here's Why

In the past three years, the share price of Beardsell Limited (NSE:BEARDSELL) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15 September 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Beardsell

Comparing Beardsell Limited's CEO Compensation With the industry

At the time of writing, our data shows that Beardsell Limited has a market capitalization of ₹385m, and reported total annual CEO compensation of ₹3.7m for the year to March 2021. That's a slight decrease of 4.5% on the prior year. We note that the salary portion, which stands at ₹2.88m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹3.7m. From this we gather that Amrith Anumolu is paid around the median for CEOs in the industry.

Component	2021	2020	Proportion (2021)
Salary	₹2.9m	₹3.0m	78%
Other	₹823k	₹839k	22%
Total Compensation	₹3.7m	₹3.9m	100%

On an industry level, around 100% of total compensation represents salary and 0.26645% is other remuneration. Beardsell sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Beardsell Limited's Growth Numbers

Beardsell Limited has seen its earnings per share (EPS) increase by 13% a year over the past three years. In the last year, its revenue is up 12%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Beardsell Limited Been A Good Investment?

The return of -58% over three years would not have pleased Beardsell Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Beardsell (of which 3 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Beardsell, 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.

When trading Beardsell or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.