The Compensation For NCC Limited's (NSE:NCC) CEO Looks Deserved And Here's Why

Key Insights

• NCC to hold its Annual General Meeting on 14th of September
• CEO Alluri Ananta Venkata Raju's total compensation includes salary of ₹16.3m
• Total compensation is similar to the industry average
• NCC's EPS grew by 34% over the past three years while total shareholder return over the past three years was 323%

It would be hard to discount the role that CEO Alluri Ananta Venkata Raju has played in delivering the impressive results at NCC Limited (NSE:NCC) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 14th of September. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for NCC

Comparing NCC Limited's CEO Compensation With The Industry

Our data indicates that NCC Limited has a market capitalization of ₹199b, and total annual CEO compensation was reported as ₹110m for the year to March 2024. That's a notable increase of 18% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹16m.

On comparing similar companies from the Indian Construction industry with market caps ranging from ₹84b to ₹269b, we found that the median CEO total compensation was ₹102m. This suggests that NCC remunerates its CEO largely in line with the industry average. Furthermore, Alluri Ananta Venkata Raju directly owns ₹627m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹16m	₹16m	15%
Other	₹93m	₹77m	85%
Total Compensation	₹110m	₹93m	100%

Speaking on an industry level, nearly 99% of total compensation represents salary, while the remainder of 0.55248619% is other remuneration. It's interesting to note that NCC allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

NCC Limited's Growth

Over the past three years, NCC Limited has seen its earnings per share (EPS) grow by 34% per year. Its revenue is up 32% over the last year.

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. 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 NCC Limited Been A Good Investment?

We think that the total shareholder return of 323%, over three years, would leave most NCC 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...

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.

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 NCC that investors should think about before committing capital to this 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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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.