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In 2006 Najeeb Ghauri was appointed CEO of NetSol Technologies, Inc. (NASDAQ:NTWK). 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.
How Does Najeeb Ghauri’s Compensation Compare With Similar Sized Companies?
Our data indicates that NetSol Technologies, Inc. is worth US$85m, and total annual CEO compensation is US$800k. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$600k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$299k.
As you can see, Najeeb Ghauri is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean NetSol Technologies, Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at NetSol Technologies, below.
Is NetSol Technologies, Inc. Growing?
NetSol Technologies, Inc. has increased its earnings per share (EPS) by an average of 45% a year, over the last three years (using a line of best fit). It achieved revenue growth of 12% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has NetSol Technologies, Inc. Been A Good Investment?
Given the total loss of 0.7% over three years, many shareholders in NetSol Technologies, Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount NetSol Technologies, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at NetSol Technologies.
Important note: NetSol 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 email@example.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.