This Is The Reason Why We Think Swan Energy Limited's (NSE:SWANENERGY) CEO Might Be Underpaid

Key Insights

• Swan Energy's Annual General Meeting to take place on 26th of September
• CEO Nikhil Merchant's total compensation includes salary of ₹13.8m
• The total compensation is 61% less than the average for the industry
• Over the past three years, Swan Energy's EPS grew by 109% and over the past three years, the total shareholder return was 344%

Shareholders will be pleased by the impressive results for Swan Energy Limited (NSE:SWANENERGY) recently and CEO Nikhil Merchant has played a key role. At the upcoming AGM on 26th of September, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

See our latest analysis for Swan Energy

Comparing Swan Energy Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Swan Energy Limited has a market capitalization of ₹180b, and reported total annual CEO compensation of ₹14m for the year to March 2024. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹14m.

On comparing similar companies from the Indian Luxury industry with market caps ranging from ₹84b to ₹268b, we found that the median CEO total compensation was ₹36m. That is to say, Nikhil Merchant is paid under the industry median. Furthermore, Nikhil Merchant directly owns ₹26m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹14m	₹14m	100%
Other	-	-	-
Total Compensation	₹14m	₹14m	100%

Talking in terms of the industry, salary represented approximately 99% of total compensation out of all the companies we analyzed, while other remuneration made up 1% of the pie. At the company level, Swan Energy pays Nikhil Merchant solely through a salary, preferring to go down a conventional route. 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 Swan Energy Limited's Growth Numbers

Swan Energy Limited's earnings per share (EPS) grew 109% per year over the last three years. In the last year, its revenue is up 170%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Swan Energy Limited Been A Good Investment?

Most shareholders would probably be pleased with Swan Energy Limited for providing a total return of 344% 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...

Swan Energy pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Swan Energy that you should be aware of before investing.

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.