Shareholders Would Not Be Objecting To NTPC Limited's (NSE:NTPC) CEO Compensation And Here's Why

Key Insights

• NTPC to hold its Annual General Meeting on 29th of August
• Total pay for CEO Gurdeep Singh includes ₹7.82m salary
• The overall pay is comparable to the industry average
• NTPC's total shareholder return over the past three years was 311% while its EPS grew by 13% over the past three years

It would be hard to discount the role that CEO Gurdeep Singh has played in delivering the impressive results at NTPC Limited (NSE:NTPC) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 29th of August. The focus will probably be on the future company strategy as shareholders 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.

View our latest analysis for NTPC

Comparing NTPC Limited's CEO Compensation With The Industry

Our data indicates that NTPC Limited has a market capitalization of ₹3.9t, and total annual CEO compensation was reported as ₹16m for the year to March 2024. That's slightly lower by 5.3% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹7.8m.

For comparison, other companies in the Indian Renewable Energy industry with market capitalizations above ₹671b, reported a median total CEO compensation of ₹16m. From this we gather that Gurdeep Singh is paid around the median for CEOs in the industry. Furthermore, Gurdeep Singh directly owns ₹2.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹7.8m	₹7.8m	49%
Other	₹8.1m	₹9.0m	51%
Total Compensation	₹16m	₹17m	100%

Talking in terms of the industry, salary represented approximately 86% of total compensation out of all the companies we analyzed, while other remuneration made up 14% of the pie. In NTPC's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at NTPC Limited's Growth Numbers

NTPC Limited's earnings per share (EPS) grew 13% per year over the last three years. In the last year, its revenue is up 4.5%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 NTPC Limited Been A Good Investment?

We think that the total shareholder return of 311%, over three years, would leave most NTPC Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its 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. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for NTPC (1 is concerning!) that you should be aware of before investing here.

Important note: NTPC 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.