How Should Investors Feel About Orient Green Power's (NSE:GREENPOWER) CEO Remuneration?

Venkatachalam Ayyar has been the CEO of Orient Green Power Company Limited (NSE:GREENPOWER) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Orient Green Power pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Orient Green Power

How Does Total Compensation For Venkatachalam Ayyar Compare With Other Companies In The Industry?

Our data indicates that Orient Green Power Company Limited has a market capitalization of ₹2.6b, and total annual CEO compensation was reported as ₹6.5m for the year to March 2020. That's a notable decrease of 19% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹6.5m.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.0m. This suggests that Venkatachalam Ayyar is paid more than the median for the industry.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. At the company level, Orient Green Power pays Venkatachalam Ayyar solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Orient Green Power Company Limited's Growth Numbers

Orient Green Power Company Limited has seen its earnings per share (EPS) increase by 75% a year over the past three years. Revenue was pretty flat on last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Orient Green Power Company Limited Been A Good Investment?

Since shareholders would have lost about 76% over three years, some Orient Green Power Company Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Orient Green Power rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Orient Green Power pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we'd stop short of calling it inappropriate, we think Venkatachalam is earning a very handsome sum.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Orient Green Power you should be aware of, and 1 of them is concerning.

Switching gears from Orient Green Power, 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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