A Quick Analysis On BPL's (NSE:BPL) CEO Compensation

Ajit Nambiar has been the CEO of BPL Limited (NSE:BPL) since 1993, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for BPL.

View our latest analysis for BPL

How Does Total Compensation For Ajit Nambiar Compare With Other Companies In The Industry?

According to our data, BPL Limited has a market capitalization of ₹1.1b, and paid its CEO total annual compensation worth ₹11m over the year to March 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of ₹6.00m, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹4.1m. Hence, we can conclude that Ajit Nambiar is remunerated higher than the industry median. Moreover, Ajit Nambiar also holds ₹1.8m worth of BPL stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 97% of total compensation represents salary, while the remainder of 3.2% is other remuneration. In BPL's 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.

A Look at BPL Limited's Growth Numbers

Over the last three years, BPL Limited has shrunk its earnings per share by 23% per year. It saw its revenue drop 41% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 BPL Limited Been A Good Investment?

Since shareholders would have lost about 78% over three years, some BPL Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As previously discussed, Ajit is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. Arguably worse, we've been waiting for positive EPS growth for the last three years. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

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 BPL that you should be aware of before investing.

Important note: BPL 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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