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In 2016 JP Chalasani was appointed CEO of Suzlon Energy Limited (NSE:SUZLON). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Suzlon Energy
How Does JP Chalasani's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Suzlon Energy Limited has a market cap of ₹31b, and is paying total annual CEO compensation of ₹90m. (This figure is for the year to March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at ₹82m. We looked at a group of companies with market capitalizations from ₹14b to ₹55b, and the median CEO total compensation was ₹22m.
Thus we can conclude that JP Chalasani receives more in total compensation than the median of a group of companies in the same market, and of similar size to Suzlon Energy Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Suzlon Energy has changed over time.
Is Suzlon Energy Limited Growing?
Over the last three years Suzlon Energy Limited has shrunk its earnings per share by an average of 68% per year (measured with a line of best fit). It saw its revenue drop -40% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Suzlon Energy Limited Been A Good Investment?
With a three year total loss of 67%, Suzlon Energy Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We examined the amount Suzlon Energy Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.