What We Learned About MITCON Consultancy & Engineering Services' (NSE:MITCON) CEO Pay

Pradeep Bavadekar became the CEO of MITCON Consultancy & Engineering Services Limited (NSE:MITCON) in 1995, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether MITCON Consultancy & Engineering Services pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for MITCON Consultancy & Engineering Services

Comparing MITCON Consultancy & Engineering Services Limited's CEO Compensation With the industry

Our data indicates that MITCON Consultancy & Engineering Services Limited has a market capitalization of ₹448m, and total annual CEO compensation was reported as ₹9.1m for the year to March 2020. That's a fairly small increase of 3.6% over the previous year. In particular, the salary of ₹7.38m, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.4m. Hence, we can conclude that Pradeep Bavadekar is remunerated higher than the industry median. Moreover, Pradeep Bavadekar also holds ₹19m worth of MITCON Consultancy & Engineering Services stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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. It's interesting to note that MITCON Consultancy & Engineering Services 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 MITCON Consultancy & Engineering Services Limited's Growth Numbers

Over the last three years, MITCON Consultancy & Engineering Services Limited has shrunk its earnings per share by 15% per year. It achieved revenue growth of 70% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has MITCON Consultancy & Engineering Services Limited Been A Good Investment?

With a three year total loss of 42% for the shareholders, MITCON Consultancy & Engineering Services Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, MITCON Consultancy & Engineering Services pays its CEO higher than the norm for similar-sized companies belonging to the same industry. It concerns us that EPS growth for the company is negative, while share price gains did not materialize over the last three years. On a more positive note, the company has produced a more positive revenue growth more recently. Suffice it to say, we don't think the CEO is underpaid!

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for MITCON Consultancy & Engineering Services you should be aware of, and 3 of them are concerning.

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. 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.
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