In This Article:
B. Thiagarajan became the CEO of Blue Star Limited (NSE:BLUESTARCO) in 2016. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does B. Thiagarajan's Compensation Compare With Similar Sized Companies?
According to our data, Blue Star Limited has a market capitalization of ₹63b, and pays its CEO total annual compensation worth ₹50m. (This is based on the year to March 2018). While we always look at total compensation first, we note that the salary component is less, at ₹7.6m. We looked at a group of companies with market capitalizations from ₹28b to ₹112b, and the median CEO total compensation was ₹25m.
Thus we can conclude that B. Thiagarajan receives more in total compensation than the median of a group of companies in the same market, and of similar size to Blue Star Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Blue Star has changed over time.
Is Blue Star Limited Growing?
On average over the last three years, Blue Star Limited has grown earnings per share (EPS) by 25% each year (using a line of best fit). It achieved revenue growth of 9.5% over the last year.
This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has Blue Star Limited Been A Good Investment?
I think that the total shareholder return of 58%, over three years, would leave most Blue Star Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We examined the amount Blue Star Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Blue Star shares (free trial).