A Quick Analysis On BSL's (NSE:BSL) CEO Salary

The CEO of BSL Limited (NSE:BSL) is Arun Churiwal, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether BSL pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for BSL

Comparing BSL Limited's CEO Compensation With the industry

At the time of writing, our data shows that BSL Limited has a market capitalization of ₹383m, and reported total annual CEO compensation of ₹13m for the year to March 2020. That's just a smallish increase of 4.7% on last year. In particular, the salary of ₹6.66m, 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 ₹3.8m. Accordingly, our analysis reveals that BSL Limited pays Arun Churiwal north of the industry median. Moreover, Arun Churiwal also holds ₹39m worth of BSL 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, all of total compensation represents salary, while non-salary remuneration is completely ignored. BSL sets aside a smaller share of compensation for salary, in comparison to the overall 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.

BSL Limited's Growth

Over the last three years, BSL Limited has shrunk its earnings per share by 75% per year. It saw its revenue drop 24% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has BSL Limited Been A Good Investment?

Since shareholders would have lost about 63% over three years, some BSL Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, BSL pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

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 4 warning signs (and 3 which are concerning) in BSL we think you should know about.

Important note: BSL 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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