Our Take On Virtusa Corporation's (NASDAQ:VRTU) CEO Salary
In 2000 Kris Canekeratne was appointed CEO of Virtusa Corporation (NASDAQ:VRTU). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Virtusa
How Does Kris Canekeratne's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Virtusa Corporation has a market cap of US$1.5b, and reported total annual CEO compensation of US$8.0m for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$513k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from US$1.0b to US$3.2b, and discovered that the median CEO total compensation of that group was US$3.9m.
Thus we can conclude that Kris Canekeratne receives more in total compensation than the median of a group of companies in the same market, and of similar size to Virtusa Corporation. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Virtusa has changed from year to year.
Is Virtusa Corporation Growing?
Over the last three years Virtusa Corporation has grown its earnings per share (EPS) by an average of 20% per year (using a line of best fit). Its revenue is up 9.0% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. You might want to check this free visual report on analyst forecasts for future earnings.
Has Virtusa Corporation Been A Good Investment?
Most shareholders would probably be pleased with Virtusa Corporation for providing a total return of 74% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared the total CEO remuneration paid by Virtusa Corporation, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Virtusa insiders are buying or selling shares.
If you want to buy a stock that is better than Virtusa, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.
