We Discuss Whether NBCC (India) Limited's (NSE:NBCC) CEO Is Due For A Pay Rise

Key Insights

• NBCC (India)'s Annual General Meeting to take place on 26th of September
• CEO Pawan Gupta's total compensation includes salary of ₹6.74m
• The total compensation is 87% less than the average for the industry
• NBCC (India)'s EPS grew by 117% over the past three years while total shareholder return over the past three years was 157%

Shareholders will be pleased by the impressive results for NBCC (India) Limited (NSE:NBCC) recently and CEO Pawan Gupta has played a key role. At the upcoming AGM on 26th 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. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

See our latest analysis for NBCC (India)

Comparing NBCC (India) Limited's CEO Compensation With The Industry

At the time of writing, our data shows that NBCC (India) Limited has a market capitalization of ₹106b, and reported total annual CEO compensation of ₹11m for the year to March 2023. Notably, that's an increase of 46% over the year before. We note that the salary portion, which stands at ₹6.74m constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the Indian Construction industry with market capitalizations between ₹83b and ₹267b, we discovered that the median CEO total compensation of that group was ₹87m. In other words, NBCC (India) pays its CEO lower than the industry median.

Component	2023	2022	Proportion (2023)
Salary	₹6.7m	₹5.0m	61%
Other	₹4.4m	₹2.6m	39%
Total Compensation	₹11m	₹7.6m	100%

Talking in terms of the industry, salary represented approximately 98% of total compensation out of all the companies we analyzed, while other remuneration made up 2% of the pie. It's interesting to note that NBCC (India) allocates a smaller portion of compensation to salary in comparison to the broader industry. 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 NBCC (India) Limited's Growth Numbers

NBCC (India) Limited's earnings per share (EPS) grew 117% per year over the last three years. Its revenue is up 9.8% 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has NBCC (India) Limited Been A Good Investment?

We think that the total shareholder return of 157%, over three years, would leave most NBCC (India) Limited shareholders smiling. 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...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for NBCC (India) that you should be aware of before investing.

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.