Shareholders May Not Be So Generous With Bhandari Hosiery Exports Limited's (NSE:BHANDARI) CEO Compensation And Here's Why

CEO Nitin Bhandari has done a decent job of delivering relatively good performance at Bhandari Hosiery Exports Limited (NSE:BHANDARI) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 30 September 2021. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Bhandari Hosiery Exports

Comparing Bhandari Hosiery Exports Limited's CEO Compensation With the industry

At the time of writing, our data shows that Bhandari Hosiery Exports Limited has a market capitalization of ₹466m, and reported total annual CEO compensation of ₹4.4m for the year to March 2021. We note that's an increase of 41% above last year. Notably, the salary which is ₹3.12m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.3m. This suggests that Nitin Bhandari is paid more than the median for the industry. What's more, Nitin Bhandari holds ₹81m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	₹3.1m	₹1.4m	71%
Other	₹1.3m	₹1.7m	29%
Total Compensation	₹4.4m	₹3.1m	100%

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. It's interesting to note that Bhandari Hosiery Exports allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Bhandari Hosiery Exports Limited's Growth

Bhandari Hosiery Exports Limited has seen its earnings per share (EPS) increase by 2.2% a year over the past three years. In the last year, its revenue is up 1.6%.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bhandari Hosiery Exports Limited Been A Good Investment?

Boasting a total shareholder return of 55% over three years, Bhandari Hosiery Exports Limited has done well by shareholders. 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 up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which are a bit concerning) in Bhandari Hosiery Exports we think you should know about.

Important note: Bhandari Hosiery Exports 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. 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.
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