Here's Why Swelect Energy Systems Limited's (NSE:SWELECTES) CEO Compensation Is The Least Of Shareholders' Concerns

Key Insights

• Swelect Energy Systems will host its Annual General Meeting on 25th of July
• CEO Arthanari Balan's total compensation includes salary of ₹3.55m
• The total compensation is similar to the average for the industry
• Swelect Energy Systems' EPS declined by 36% over the past three years while total shareholder return over the past three years was 83%

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Performance at Swelect Energy Systems Limited (NSE:SWELECTES) has been reasonably good and CEO Arthanari Balan has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25th of July. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for Swelect Energy Systems

How Does Total Compensation For Arthanari Balan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Swelect Energy Systems Limited has a market capitalization of ₹8.9b, and reported total annual CEO compensation of ₹5.3m for the year to March 2025. We note that's an increase of 19% above last year. In particular, the salary of ₹3.55m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Indian Electrical industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹4.4m. This suggests that Swelect Energy Systems remunerates its CEO largely in line with the industry average. What's more, Arthanari Balan holds ₹276m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 83% of total compensation out of all the companies we analyzed, while other remuneration made up 17% of the pie. In Swelect Energy Systems' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Swelect Energy Systems Limited's Growth

Swelect Energy Systems Limited has reduced its earnings per share by 36% a year over the last three years. It achieved revenue growth of 156% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Swelect Energy Systems Limited Been A Good Investment?

Most shareholders would probably be pleased with Swelect Energy Systems Limited for providing a total return of 83% over three years. 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...

Although the company has performed relatively well, we still think there are some areas that could be improved. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.

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. We identified 4 warning signs for Swelect Energy Systems (1 is concerning!) that you should be aware of before investing here.

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.