Prashant Jain became the CEO of JSW Energy Limited (NSE:JSWENERGY) in 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for JSW Energy
How Does Prashant Jain's Compensation Compare With Similar Sized Companies?
According to our data, JSW Energy Limited has a market capitalization of ₹117b, and paid its CEO total annual compensation worth ₹26m over the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at ₹20m. We looked at a group of companies with market capitalizations from ₹71b to ₹227b, and the median CEO total compensation was ₹47m.
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.
The graphic below shows how CEO compensation at JSW Energy has changed from year to year.
Is JSW Energy Limited Growing?
Over the last three years JSW Energy Limited has shrunk its earnings per share by an average of 21% per year (measured with a line of best fit). It achieved revenue growth of 3.7% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has JSW Energy Limited Been A Good Investment?
JSW Energy Limited has served shareholders reasonably well, with a total return of 19% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
It looks like JSW Energy Limited pays its CEO less than similar sized companies.
Shareholders should note that compensation for Prashant Jain is under the median of a group of similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer see improved performance, before increasing pay. Whatever your view on compensation, you might want to check if insiders are buying or selling JSW Energy shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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