Is Johnson Controls-Hitachi Air Conditioning India Limited's (NSE:JCHAC) CEO Paid Enough Relative To Peers?
Gurmeet Singh became the CEO of Johnson Controls-Hitachi Air Conditioning India Limited (NSE:JCHAC) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Johnson Controls-Hitachi Air Conditioning India
How Does Gurmeet Singh's Compensation Compare With Similar Sized Companies?
Our data indicates that Johnson Controls-Hitachi Air Conditioning India Limited is worth ₹44b, and total annual CEO compensation is ₹19m. (This is based on the year to March 2019). That's a notable increase of 29% on last year. While we always look at total compensation first, we note that the salary component is less, at ₹11m. We looked at a group of companies with market capitalizations from ₹29b to ₹115b, and the median CEO total compensation was ₹26m.
So Gurmeet Singh receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Johnson Controls-Hitachi Air Conditioning India, below.
Is Johnson Controls-Hitachi Air Conditioning India Limited Growing?
Over the last three years Johnson Controls-Hitachi Air Conditioning India Limited has grown its earnings per share (EPS) by an average of 8.9% per year (using a line of best fit). It achieved revenue growth of 13% over the last year.
This revenue growth could really point to a brighter future. And the improvement in earnings per share is modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. It could be important to check this free visual depiction of what analysts expect for the future.
Has Johnson Controls-Hitachi Air Conditioning India Limited Been A Good Investment?
Johnson Controls-Hitachi Air Conditioning India Limited has generated a total shareholder return of 6.6% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Gurmeet Singh is paid around what is normal the leaders of comparable size companies.
We think many would like to see better growth. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. Shareholders may want to check for free if Johnson Controls-Hitachi Air Conditioning India insiders are buying or selling shares.
If you want to buy a stock that is better than Johnson Controls-Hitachi Air Conditioning India, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
