Here's Why It's Unlikely That Nagarro SE's (FRA:NA9) CEO Will See A Pay Rise This Year

Key Insights

• Nagarro's Annual General Meeting to take place on 27th of June
• Total pay for CEO Manas Human includes €329.6k salary
• Total compensation is similar to the industry average
• Over the past three years, Nagarro's EPS fell by 11% and over the past three years, the total loss to shareholders 24%

The results at Nagarro SE (FRA:NA9) have been quite disappointing recently and CEO Manas Human bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 27th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

View our latest analysis for Nagarro

Comparing Nagarro SE's CEO Compensation With The Industry

At the time of writing, our data shows that Nagarro SE has a market capitalization of €1.0b, and reported total annual CEO compensation of €330k for the year to December 2023. That is, the compensation was roughly the same as last year. Notably, the salary of €330k is the entirety of the CEO compensation.

In comparison with other companies in the German IT industry with market capitalizations ranging from €374m to €1.5b, the reported median CEO total compensation was €443k. From this we gather that Manas Human is paid around the median for CEOs in the industry. Moreover, Manas Human also holds €6.3m worth of Nagarro stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	€330k	€320k	100%
Other	-	€10k	-
Total Compensation	€330k	€330k	100%

On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. At the company level, Nagarro pays Manas Human solely through a salary, preferring to go down a conventional route. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Nagarro SE's Growth Numbers

Over the last three years, Nagarro SE has shrunk its earnings per share by 11% per year. Its revenue is up 2.3% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Nagarro SE Been A Good Investment?

Since shareholders would have lost about 24% over three years, some Nagarro SE investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Nagarro rewards its CEO solely through a salary, ignoring non-salary benefits completely. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Nagarro that investors should be aware of in a dynamic business environment.

Switching gears from Nagarro, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com