Power Mech Projects Limited's (NSE:POWERMECH) CEO Will Probably Have Their Compensation Approved By Shareholders

Key Insights

• Power Mech Projects' Annual General Meeting to take place on 27th of September
• Total pay for CEO Sajja Babu includes ₹18.0m salary
• Total compensation is similar to the industry average
• Over the past three years, Power Mech Projects' EPS grew by 138% and over the past three years, the total shareholder return was 623%

We have been pretty impressed with the performance at Power Mech Projects Limited (NSE:POWERMECH) recently and CEO Sajja Babu deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 27th of September. 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 Power Mech Projects

Comparing Power Mech Projects Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Power Mech Projects Limited has a market capitalization of ₹103b, and reported total annual CEO compensation of ₹117m for the year to March 2024. This was the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹18m.

For comparison, other companies in the Indian Construction industry with market capitalizations ranging between ₹84b and ₹267b had a median total CEO compensation of ₹109m. This suggests that Power Mech Projects remunerates its CEO largely in line with the industry average. Furthermore, Sajja Babu directly owns ₹32b worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹18m	₹18m	15%
Other	₹99m	₹99m	85%
Total Compensation	₹117m	₹117m	100%

On an industry level, roughly 98% of total compensation represents salary and 2% is other remuneration. Power Mech Projects pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Power Mech Projects Limited's Growth Numbers

Power Mech Projects Limited has seen its earnings per share (EPS) increase by 138% a year over the past three years. Its revenue is up 17% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Power Mech Projects Limited Been A Good Investment?

We think that the total shareholder return of 623%, over three years, would leave most Power Mech Projects 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...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Power Mech Projects that investors should think about before committing capital to this stock.

Important note: Power Mech Projects is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.