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Does Agilysys, Inc.'s (NASDAQ:AGYS) CEO Pay Reflect Performance?

Simply Wall St

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Ramesh Srinivasan has been the CEO of Agilysys, Inc. (NASDAQ:AGYS) since 2017. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Agilysys

How Does Ramesh Srinivasan's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Agilysys, Inc. has a market cap of US$523m, and is paying total annual CEO compensation of US$1.1m. (This number is for the twelve months until March 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$600k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.7m.

Most shareholders would consider it a positive that Ramesh Srinivasan takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.

The graphic below shows how CEO compensation at Agilysys has changed from year to year.

NasdaqGS:AGYS CEO Compensation, July 10th 2019

Is Agilysys, Inc. Growing?

On average over the last three years, Agilysys, Inc. has shrunk earnings per share by 15% each year (measured with a line of best fit). Its revenue is up 11% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has Agilysys, Inc. Been A Good Investment?

Most shareholders would probably be pleased with Agilysys, Inc. for providing a total return of 105% over three years. 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...

It looks like Agilysys, Inc. pays its CEO less than similar sized companies.

Ramesh Srinivasan receives relatively low remuneration compared to similar sized companies. And while the company isn't growing earnings per share, total returns have been pleasing. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. Shareholders may want to check for free if Agilysys insiders are buying or selling shares.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.