We Think Shareholders Will Probably Be Generous With HBL Power Systems Limited's (NSE:HBLPOWER) CEO Compensation

Key Insights

• HBL Power Systems will host its Annual General Meeting on 28th of September
• Salary of ₹9.62m is part of CEO Aluru Prasad's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, HBL Power Systems' EPS grew by 181% and over the past three years, the total shareholder return was 1,555%

The performance at HBL Power Systems Limited (NSE:HBLPOWER) has been quite strong recently and CEO Aluru Prasad has played a role in it. Coming up to the next AGM on 28th of September, shareholders would be keeping this in mind. 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.

View our latest analysis for HBL Power Systems

Comparing HBL Power Systems Limited's CEO Compensation With The Industry

At the time of writing, our data shows that HBL Power Systems Limited has a market capitalization of ₹69b, and reported total annual CEO compensation of ₹47m for the year to March 2023. That's a modest increase of 4.6% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹9.6m.

On examining similar-sized companies in the Indian Electrical industry with market capitalizations between ₹33b and ₹133b, we discovered that the median CEO total compensation of that group was ₹40m. This suggests that HBL Power Systems remunerates its CEO largely in line with the industry average. Furthermore, Aluru Prasad directly owns ₹667m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₹9.6m	₹9.6m	20%
Other	₹38m	₹36m	80%
Total Compensation	₹47m	₹45m	100%

Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. HBL Power Systems sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at HBL Power Systems Limited's Growth Numbers

HBL Power Systems Limited's earnings per share (EPS) grew 181% per year over the last three years. Its revenue is up 14% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 HBL Power Systems Limited Been A Good Investment?

Most shareholders would probably be pleased with HBL Power Systems Limited for providing a total return of 1,555% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar 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. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for HBL Power Systems that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.