Is Honeywell Automation India Limited's (NSE:HONAUT) CEO Being Overpaid?

M. Gaikwad has been the CEO of Honeywell Automation India Limited (NSE:HONAUT) since 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. 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.

View our latest analysis for Honeywell Automation India

How Does M. Gaikwad's Compensation Compare With Similar Sized Companies?

Our data indicates that Honeywell Automation India Limited is worth ₹246b, and total annual CEO compensation was reported as ₹31m for the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at ₹12m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from ₹144b to ₹459b, we found the median CEO total compensation was ₹51m.

A first glance this seems like a real positive for shareholders, since M. Gaikwad is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Honeywell Automation India has changed from year to year.

Is Honeywell Automation India Limited Growing?

Over the last three years Honeywell Automation India Limited has grown its earnings per share (EPS) by an average of 34% per year (using a line of best fit). It achieved revenue growth of 13% over the last year.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Honeywell Automation India Limited Been A Good Investment?

Boasting a total shareholder return of 226% over three years, Honeywell Automation India Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Honeywell Automation India Limited is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. The strong history of shareholder returns might even have some thinking that M. Gaikwad deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. So you may want to check if insiders are buying Honeywell Automation India shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.