Increases to CEO Compensation Might Be Put On Hold For Now at BPL Limited (NSE:BPL)

Key Insights

• BPL will host its Annual General Meeting on 17th of September
• CEO Ajit Nambiar's total compensation includes salary of ₹10.5m
• The overall pay is 162% above the industry average
• BPL's total shareholder return over the past three years was 75% while its EPS grew by 80% over the past three years

Under the guidance of CEO Ajit Nambiar, BPL Limited (NSE:BPL) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 17th of September. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for BPL

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

Our data indicates that BPL Limited has a market capitalization of ₹5.7b, and total annual CEO compensation was reported as ₹10m for the year to March 2024. That's a fairly small increase of 5.1% over the previous year. Notably, the salary of ₹10m is the entirety of the CEO compensation.

On comparing similar-sized companies in the Indian Consumer Durables industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹4.0m. This suggests that Ajit Nambiar is paid more than the median for the industry. Moreover, Ajit Nambiar also holds ₹9.4m worth of BPL stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹10m	₹10.0m	100%
Other	-	-	-
Total Compensation	₹10m	₹10.0m	100%

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7% is other remuneration. On a company level, BPL prefers to reward its CEO through a salary, opting not to pay Ajit Nambiar through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at BPL Limited's Growth Numbers

BPL Limited's earnings per share (EPS) grew 80% per year over the last three years. It achieved revenue growth of 31% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has BPL Limited Been A Good Investment?

Boasting a total shareholder return of 75% over three years, BPL 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.

To Conclude...

BPL pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for BPL you should be aware of, and 1 of them can't be ignored.

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. 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.