Shareholders Will Probably Hold Off On Increasing Madhucon Projects Limited's (NSE:MADHUCON) CEO Compensation For The Time Being

Key Insights

• Madhucon Projects will host its Annual General Meeting on 27th of September
• Salary of ₹6.00m is part of CEO Nama Seethaiah's total remuneration
• The total compensation is 100% higher than the average for the industry
• Madhucon Projects' EPS grew by 33% over the past three years while total shareholder return over the past three years was 172%

Performance at Madhucon Projects Limited (NSE:MADHUCON) has been reasonably good and CEO Nama Seethaiah has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27th of September. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Madhucon Projects

How Does Total Compensation For Nama Seethaiah Compare With Other Companies In The Industry?

Our data indicates that Madhucon Projects Limited has a market capitalization of ₹919m, and total annual CEO compensation was reported as ₹6.0m for the year to March 2024. There was no change in the compensation compared to last year. Notably, the salary of ₹6.0m is the entirety of the CEO compensation.

On comparing similar-sized companies in the Indian Construction industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹3.0m. This suggests that Nama Seethaiah is paid more than the median for the industry. Moreover, Nama Seethaiah also holds ₹297k worth of Madhucon Projects stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹6.0m	₹6.0m	100%
Other	-	-	-
Total Compensation	₹6.0m	₹6.0m	100%

On an industry level, roughly 98% of total compensation represents salary and 2% is other remuneration. On a company level, Madhucon Projects prefers to reward its CEO through a salary, opting not to pay Nama Seethaiah through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Madhucon Projects Limited's Growth

Madhucon Projects Limited has seen its earnings per share (EPS) increase by 33% a year over the past three years. In the last year, its revenue is down 27%.

Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Madhucon Projects Limited Been A Good Investment?

We think that the total shareholder return of 172%, over three years, would leave most Madhucon Projects Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Madhucon Projects rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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 4 warning signs for Madhucon Projects (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.