In 2008 Rohit Kapoor was appointed CEO of ExlService Holdings, Inc. (NASDAQ:EXLS). 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Rohit Kapoor’s Compensation Compare With Similar Sized Companies?
Our data indicates that ExlService Holdings, Inc. is worth US$2.6b, and total annual CEO compensation was reported as US$5.1m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$720k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$4.9m.
So Rohit Kapoor receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at ExlService Holdings has changed from year to year.
Is ExlService Holdings, Inc. Growing?
On average over the last three years, ExlService Holdings, Inc. has shrunk earnings per share by 13% each year (measured with a line of best fit). It achieved revenue growth of 15% over the 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 ExlService Holdings, Inc. Been A Good Investment?
I think that the total shareholder return of 62%, over three years, would leave most ExlService Holdings, Inc. 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.
Rohit Kapoor is paid around what is normal the leaders of comparable size companies.
The company isn’t growing earnings per share, but shareholder returns have been strong over the last three years. So we think most shareholders wouldn’t be too worried about CEO compensation, which is close to the median for similar sized companies. Shareholders may want to check for free if ExlService Holdings insiders are buying or selling shares.
If you want to buy a stock that is better than ExlService Holdings, this free list of high return, low debt companies is a great place to look.
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