Is Steel Authority of India Limited (NSE:SAIL) Overpaying Its CEO?

The CEO of Steel Authority of India Limited (NSE:SAIL) is Anil Chaudhary. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Steel Authority of India

How Does Anil Chaudhary’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Steel Authority of India Limited has a market cap of ₹162b, and reported total annual CEO compensation of ₹4.4m for the year to March 2019. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at ₹3.9m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ₹72b to ₹230b. The median total CEO compensation was ₹46m.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Steel Authority of India, below.

NSEI:SAIL CEO Compensation, February 27th 2020
NSEI:SAIL CEO Compensation, February 27th 2020

Is Steel Authority of India Limited Growing?

Over the last three years Steel Authority of India Limited has grown its earnings per share (EPS) by an average of 96% per year (using a line of best fit). Its revenue is down 1.0% over last year.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Steel Authority of India Limited Been A Good Investment?

With a three year total loss of 38%, Steel Authority of India Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

It looks like Steel Authority of India Limited pays its CEO less than similar sized companies.

Many would consider this to indicate that the pay is modest since the business is growing. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Anil Chaudhary is generously paid, it would be good to see an improvement in business performance before too an increase in pay. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. So you may want to check if insiders are buying Steel Authority of India shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.

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