How Is Bharat Electronics' (NSE:BEL) CEO Paid Relative To Peers?

This article will reflect on the compensation paid to M. Gowtama who has served as CEO of Bharat Electronics Limited (NSE:BEL) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Bharat Electronics.

View our latest analysis for Bharat Electronics

Comparing Bharat Electronics Limited's CEO Compensation With the industry

According to our data, Bharat Electronics Limited has a market capitalization of ₹334b, and paid its CEO total annual compensation worth ₹7.6m over the year to March 2020. Notably, that's an increase of 15% over the year before. We note that the salary portion, which stands at ₹4.50m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from ₹148b to ₹474b, we found that the median CEO total compensation was ₹295m. That is to say, M. Gowtama is paid under the industry median.

Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. It's interesting to note that Bharat Electronics 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 Electronics Limited's Growth

Bharat Electronics Limited's earnings per share (EPS) grew 7.8% per year over the last three years. Its revenue is up 17% over the last year.

This revenue growth could really point to a brighter future. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Bharat Electronics Limited Been A Good Investment?

Given the total shareholder loss of 4.6% over three years, many shareholders in Bharat Electronics Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, M. is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But then, EPS growth is lacking and so are the returns to shareholders. We're not critical of the remuneration M. receives, but it would be good to see improved returns to shareholders before compensation grows too much.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Bharat Electronics that investors should think about before committing capital to this stock.

Important note: Bharat Electronics is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. 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.
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