Shareholders Would Not Be Objecting To H.G. Infra Engineering Limited's (NSE:HGINFRA) CEO Compensation And Here's Why

Simply Wall St
August 30, 2021
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It would be hard to discount the role that CEO Harendra Singh has played in delivering the impressive results at H.G. Infra Engineering Limited (NSE:HGINFRA) recently. Coming up to the next AGM on 06 September 2021, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for H.G. Infra Engineering

Comparing H.G. Infra Engineering Limited's CEO Compensation With the industry

Our data indicates that H.G. Infra Engineering Limited has a market capitalization of ₹36b, and total annual CEO compensation was reported as ₹22m for the year to March 2021. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at ₹21.6m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between ₹15b and ₹59b had a median total CEO compensation of ₹30m. From this we gather that Harendra Singh is paid around the median for CEOs in the industry.

Component20212020Proportion (2021)
Salary ₹22m ₹22m 98%
Other ₹450k - 2%
Total Compensation₹22m ₹22m100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. Investors will find it interesting that H.G. Infra Engineering pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

NSEI:HGINFRA CEO Compensation August 31st 2021

A Look at H.G. Infra Engineering Limited's Growth Numbers

Over the past three years, H.G. Infra Engineering Limited has seen its earnings per share (EPS) grow by 45% per year. In the last year, its revenue is up 62%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has H.G. Infra Engineering Limited Been A Good Investment?

Boasting a total shareholder return of 132% over three years, H.G. Infra Engineering 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...

H.G. Infra Engineering pays its CEO a majority of compensation through a salary. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for H.G. Infra Engineering (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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.

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