We Think The Compensation For Websol Energy System Limited's (NSE:WEBELSOLAR) CEO Looks About Right

Key Insights

• Websol Energy System will host its Annual General Meeting on 28th of September
• CEO Sohan Agarwal's total compensation includes salary of ₹17.4m
• Total compensation is similar to the industry average
• Websol Energy System's EPS declined by 128% over the past three years while total shareholder return over the past three years was 1,500%

CEO Sohan Agarwal has done a decent job of delivering relatively good performance at Websol Energy System Limited (NSE:WEBELSOLAR) recently. As shareholders go into the upcoming AGM on 28th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.

View our latest analysis for Websol Energy System

Comparing Websol Energy System Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Websol Energy System Limited has a market capitalization of ₹43b, and reported total annual CEO compensation of ₹17m for the year to March 2024. Notably, that's an increase of 31% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹17m.

For comparison, other companies in the India Semiconductor industry with market capitalizations ranging between ₹17b and ₹67b had a median total CEO compensation of ₹13m. From this we gather that Sohan Agarwal is paid around the median for CEOs in the industry. What's more, Sohan Agarwal holds ₹3.9b worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	₹17m	₹13m	100%
Other	-	-	-
Total Compensation	₹17m	₹13m	100%

On an industry level, roughly 64% of total compensation represents salary and 36% is other remuneration. At the company level, Websol Energy System pays Sohan Agarwal solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Websol Energy System Limited's Growth Numbers

Over the last three years, Websol Energy System Limited has shrunk its earnings per share by 128% per year. Its revenue is up 869% over the last year.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Websol Energy System Limited Been A Good Investment?

Most shareholders would probably be pleased with Websol Energy System Limited for providing a total return of 1,500% 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...

Websol Energy System rewards its CEO solely through a salary, ignoring non-salary benefits completely. Although the company has performed relatively well, we still think there are some areas that could be improved. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for Websol Energy System (1 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Websol Energy System, 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. 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.