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Is Swan Energy Limited's (NSE:SWANENERGY) CEO Paid At A Competitive Rate?

Simply Wall St

Nikhil Merchant has been the CEO of Swan Energy Limited (NSE:SWANENERGY) since 2009. 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Swan Energy

How Does Nikhil Merchant's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Swan Energy Limited has a market cap of ₹25b, and is paying total annual CEO compensation of ₹13m. (This is based on the year to March 2018). Notably, the salary of ₹13m is the vast majority of the CEO compensation. When we examined a selection of companies with market caps ranging from ₹14b to ₹55b, we found the median CEO total compensation was ₹23m.

A first glance this seems like a real positive for shareholders, since Nikhil Merchant is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at Swan Energy, below.

NSEI:SWANENERGY CEO Compensation, July 27th 2019

Is Swan Energy Limited Growing?

Swan Energy Limited has increased its earnings per share (EPS) by an average of 24% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 157%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Swan Energy Limited Been A Good Investment?

Boasting a total shareholder return of 66% over three years, Swan Energy Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

It appears that Swan Energy Limited remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Nikhil Merchant deserves a raise!

It's not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Swan Energy shares with their own money (free access).

If you want to buy a stock that is better than Swan Energy, 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.