How Is Surana Solar's (NSE:SURANASOL) CEO Paid Relative To Peers?

Manish Surana is the CEO of Surana Solar Limited (NSE:SURANASOL), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Surana Solar.

See our latest analysis for Surana Solar

Comparing Surana Solar Limited's CEO Compensation With the industry

At the time of writing, our data shows that Surana Solar Limited has a market capitalization of ₹394m, and reported total annual CEO compensation of ₹6.3m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of ₹4.20m, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹13m. This suggests that Manish Surana is paid below the industry median. What's more, Manish Surana holds ₹11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 78% of total compensation out of all the companies we analyzed, while other remuneration made up 22% of the pie. Surana Solar 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.

Surana Solar Limited's Growth

Over the last three years, Surana Solar Limited has shrunk its earnings per share by 43% per year. In the last year, its revenue is down 46%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Surana Solar Limited Been A Good Investment?

Given the total shareholder loss of 53% over three years, many shareholders in Surana Solar Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Surana Solar Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Over the last three years, shareholder returns have been downright disappointing, and EPSgrowth has been equally disappointing. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Surana Solar (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Surana Solar 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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