There Could Be A Chance Bharat Heavy Electricals Limited's (NSE:BHEL) CEO Will Have Their Compensation Increased

The decent performance at Bharat Heavy Electricals Limited (NSE:BHEL) recently will please most shareholders as they go into the AGM coming up on 29 September 2022. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

Check out our latest analysis for Bharat Heavy Electricals

How Does Total Compensation For Nalin Shinghal Compare With Other Companies In The Industry?

According to our data, Bharat Heavy Electricals Limited has a market capitalization of ₹206b, and paid its CEO total annual compensation worth ₹6.3m over the year to March 2022. That's a modest increase of 5.4% on the prior year. In particular, the salary of ₹5.53m, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between ₹159b and ₹510b, we discovered that the median CEO total compensation of that group was ₹11m. In other words, Bharat Heavy Electricals pays its CEO lower than the industry median.

Component	2022	2021	Proportion (2022)
Salary	₹5.5m	₹5.2m	87%
Other	₹797k	₹840k	13%
Total Compensation	₹6.3m	₹6.0m	100%

On an industry level, roughly 71% of total compensation represents salary and 29% is other remuneration. Bharat Heavy Electricals is paying a higher share of its remuneration through a 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.

Bharat Heavy Electricals Limited's Growth

Over the last three years, Bharat Heavy Electricals Limited has shrunk its earnings per share by 1.3% per year. Its revenue is up 26% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Bharat Heavy Electricals Limited Been A Good Investment?

Bharat Heavy Electricals Limited has generated a total shareholder return of 19% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Bharat Heavy Electricals that investors should think about before committing capital to this stock.

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.