What Did 3i Infotech's (NSE:3IINFOTECH) CEO Take Home Last Year?

Padmanabhan Nemmara Iyer became the CEO of 3i Infotech Limited (NSE:3IINFOTECH) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for 3i Infotech.

See our latest analysis for 3i Infotech

Comparing 3i Infotech Limited's CEO Compensation With the industry

According to our data, 3i Infotech Limited has a market capitalization of ₹7.7b, and paid its CEO total annual compensation worth ₹29m over the year to March 2020. That's a notable increase of 37% on last year. We note that the salary portion, which stands at ₹28.1m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below ₹15b, reported a median total CEO compensation of ₹4.8m. Accordingly, our analysis reveals that 3i Infotech Limited pays Padmanabhan Nemmara Iyer north of the industry median.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. 3i Infotech has gone down a largely traditional route, paying Padmanabhan Nemmara Iyer a high salary, giving it preference over non-salary benefits. 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.

3i Infotech Limited's Growth

Over the last three years, 3i Infotech Limited has shrunk its earnings per share by 2.1% per year. In the last year, its revenue is down 8.7%.

Its a bit disappointing to see that the company has failed to grow its EPS. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 3i Infotech Limited Been A Good Investment?

3i Infotech Limited has not done too badly by shareholders, with a total return of 2.2%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

3i Infotech pays its CEO a majority of compensation through a salary. As previously discussed, Padmanabhan Nemmara is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, EPS has not grown in three years, failing to impress us. While shareholder returns are acceptable, they don't delight. So you can understand why we do not think CEO compensation is particularly modest!

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for 3i Infotech that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

If you decide to trade 3i Infotech, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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