How Much Is Surana Solar Limited (NSE:SURANASOL) Paying Its CEO?

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

View 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 ₹377m, and reported total annual CEO compensation of ₹6.3m for the year to March 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is ₹4.20m, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹2.2m. Hence, we can conclude that Manish Surana is remunerated higher than the industry median. What's more, Manish Surana holds ₹10m 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 represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. 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.

A Look at Surana Solar Limited's Growth Numbers

Over the last three years, Surana Solar Limited has shrunk its earnings per share by 52% per year. Its revenue is down 38% over the previous year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. 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 Surana Solar Limited Been A Good Investment?

With a three year total loss of 49% for the shareholders, Surana Solar Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Manish is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Arguably worse, we've been waiting for positive EPS growth for the last three years. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 6 warning signs for Surana Solar (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Surana Solar, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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