Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2005 Sajjan Jindal was appointed CEO of JSW Steel Limited (NSE:JSWSTEEL). This analysis aims first to contrast CEO compensation with other large companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Sajjan Jindal's Compensation Compare With Similar Sized Companies?
According to our data, JSW Steel Limited has a market capitalization of ₹743b, and pays its CEO total annual compensation worth ₹496m. (This figure is for the year to March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at ₹107m. When we examined a group of companies with market caps over ₹553b, we found that their median CEO total compensation was ₹86m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
As you can see, Sajjan Jindal is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean JSW Steel Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at JSW Steel has changed over time.
Is JSW Steel Limited Growing?
Over the last three years JSW Steel Limited has grown its earnings per share (EPS) by an average of 87% per year (using a line of best fit). Its revenue is up 22% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has JSW Steel Limited Been A Good Investment?
Boasting a total shareholder return of 140% over three years, JSW Steel 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.
We compared the total CEO remuneration paid by JSW Steel Limited, and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying JSW Steel shares with their own money (free access).
If you want to buy a stock that is better than JSW Steel, this freelist of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
If you're looking to trade JSW Steel, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.