Shareholders Will Probably Hold Off On Increasing Generic Engineering Construction and Projects Limited's (NSE:GENCON) CEO Compensation For The Time Being

Key Insights

• Generic Engineering Construction and Projects will host its Annual General Meeting on 30th of September
• Salary of ₹6.00m is part of CEO Manish Patel's total remuneration
• The total compensation is 71% higher than the average for the industry
• Generic Engineering Construction and Projects' EPS declined by 15% over the past three years while total shareholder return over the past three years was 50%

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Despite strong share price growth of 50% for Generic Engineering Construction and Projects Limited (NSE:GENCON) over the last few years, earnings growth has been disappointing, which suggests something is amiss. Some of these issues will occupy shareholders' minds as the AGM rolls around on 30th of September. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

View our latest analysis for Generic Engineering Construction and Projects

How Does Total Compensation For Manish Patel Compare With Other Companies In The Industry?

Our data indicates that Generic Engineering Construction and Projects Limited has a market capitalization of ₹2.6b, and total annual CEO compensation was reported as ₹6.2m for the year to March 2025. That's a modest increase of 3.1% on the prior year. Notably, the salary which is ₹6.00m, represents most of the total compensation being paid.

For comparison, other companies in the Indian Construction industry with market capitalizations below ₹18b, reported a median total CEO compensation of ₹3.6m. Accordingly, our analysis reveals that Generic Engineering Construction and Projects Limited pays Manish Patel north of the industry median. Furthermore, Manish Patel directly owns ₹56m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. Generic Engineering Construction and Projects is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Generic Engineering Construction and Projects Limited's Growth

Over the last three years, Generic Engineering Construction and Projects Limited has shrunk its earnings per share by 15% per year. It achieved revenue growth of 5.7% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Generic Engineering Construction and Projects Limited Been A Good Investment?

Boasting a total shareholder return of 50% over three years, Generic Engineering Construction and Projects Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Manish receives almost all of their compensation through a salary. While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for Generic Engineering Construction and Projects that investors should think about before committing capital to this stock.

Switching gears from Generic Engineering Construction and Projects, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.