Why We Think The CEO Of Ahluwalia Contracts (India) Limited (NSE:AHLUCONT) May Soon See A Pay Rise

Key Insights

• Ahluwalia Contracts (India)'s Annual General Meeting to take place on 29th of September
• Salary of ₹12.6m is part of CEO Bikramjit Ahluwalia's total remuneration
• Total compensation is 57% below industry average
• Ahluwalia Contracts (India)'s total shareholder return over the past three years was 199% while its EPS grew by 63% over the past three years

The impressive results at Ahluwalia Contracts (India) Limited (NSE:AHLUCONT) recently will be great news for shareholders. At the upcoming AGM on 29th of September, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Ahluwalia Contracts (India)

How Does Total Compensation For Bikramjit Ahluwalia Compare With Other Companies In The Industry?

According to our data, Ahluwalia Contracts (India) Limited has a market capitalization of ₹47b, and paid its CEO total annual compensation worth ₹13m over the year to March 2023. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹13m.

On comparing similar companies from the Indian Construction industry with market caps ranging from ₹17b to ₹66b, we found that the median CEO total compensation was ₹30m. That is to say, Bikramjit Ahluwalia is paid under the industry median. Furthermore, Bikramjit Ahluwalia directly owns ₹7.7b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	₹13m	₹13m	100%
Other	-	-	-
Total Compensation	₹13m	₹13m	100%

Talking in terms of the industry, salary represented approximately 99% of total compensation out of all the companies we analyzed, while other remuneration made up 1% of the pie. At the company level, Ahluwalia Contracts (India) pays Bikramjit Ahluwalia solely through a salary, preferring to go down a conventional route. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Ahluwalia Contracts (India) Limited's Growth Numbers

Ahluwalia Contracts (India) Limited's earnings per share (EPS) grew 63% per year over the last three years. Its revenue is up 10.0% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Ahluwalia Contracts (India) Limited Been A Good Investment?

We think that the total shareholder return of 199%, over three years, would leave most Ahluwalia Contracts (India) Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Ahluwalia Contracts (India) pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

Shareholders may want to check for free if Ahluwalia Contracts (India) insiders are buying or selling shares.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.