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In 2016 Atul Sobti was appointed CEO of Bharat Heavy Electricals Limited (NSE:BHEL). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Bharat Heavy Electricals
How Does Atul Sobti’s Compensation Compare With Similar Sized Companies?
Our data indicates that Bharat Heavy Electricals Limited is worth ₹247.5b, and total annual CEO compensation is ₹5m. That’s a notable increase of 34% on last year. We looked at a group of companies with market capitalizations from ₹146.5b to ₹468.9b, and the median CEO compensation was ₹49m.
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 Bharat Heavy Electricals has changed from year to year.
Is Bharat Heavy Electricals Limited Growing?
Bharat Heavy Electricals Limited has reduced its earnings per share by an average of 25% a year, over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.
Sadly for shareholders, earnings per share are actually down, over three years. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Bharat Heavy Electricals Limited Been A Good Investment?
With a three year total loss of 51%, Bharat Heavy Electricals Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
It looks like Bharat Heavy Electricals Limited pays its CEO less than similar sized companies.
The compensation paid to Atul Sobti is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). This contrasts with the increase in CEO remuneration on last year, though it was off a low base. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Bharat Heavy Electricals Limited.