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How Should Investors Feel About IntraSoft Technologies Limited's (NSE:ISFT) CEO Pay?

Simply Wall St

The CEO of IntraSoft Technologies Limited (NSE:ISFT) is Arvind Kajaria. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for IntraSoft Technologies

How Does Arvind Kajaria's Compensation Compare With Similar Sized Companies?

Our data indicates that IntraSoft Technologies Limited is worth ₹990m, and total annual CEO compensation is ₹7.2m. (This figure is for the year to March 2019). It is worth noting that the CEO compensation consists almost entirely of the salary, worth ₹7.2m. We looked at a group of companies with market capitalizations under ₹14b, and the median CEO total compensation was ₹1.5m.

Thus we can conclude that Arvind Kajaria receives more in total compensation than the median of a group of companies in the same market, and of similar size to IntraSoft Technologies Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

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

NSEI:ISFT CEO Compensation, August 17th 2019

Is IntraSoft Technologies Limited Growing?

Over the last three years IntraSoft Technologies Limited has shrunk its earnings per share by an average of 75% per year (measured with a line of best fit). Its revenue is down -36% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has IntraSoft Technologies Limited Been A Good Investment?

Since shareholders would have lost about 84% over three years, some IntraSoft Technologies Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at IntraSoft Technologies Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at IntraSoft Technologies.

Important note: IntraSoft Technologies may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.