Key Things To Understand About Datamatics Global Services' (NSE:DATAMATICS) CEO Pay Cheque

Rahul Kanodia became the CEO of Datamatics Global Services Limited (NSE:DATAMATICS) in 2007, 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 Datamatics Global Services.

See our latest analysis for Datamatics Global Services

Comparing Datamatics Global Services Limited's CEO Compensation With the industry

According to our data, Datamatics Global Services Limited has a market capitalization of ₹6.6b, and paid its CEO total annual compensation worth ₹15m over the year to March 2020. That's a notable increase of 9.4% on last year. Notably, the salary which is ₹11.5m, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹3.0m. This suggests that Rahul Kanodia is paid more than the median for the industry.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Datamatics Global Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Datamatics Global Services Limited's Growth

Over the last three years, Datamatics Global Services Limited has shrunk its earnings per share by 4.0% per year. It saw its revenue drop 3.0% over the last year.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Datamatics Global Services Limited Been A Good Investment?

Since shareholders would have lost about 5.9% over three years, some Datamatics Global Services Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Rahul is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Datamatics Global Services that you should be aware of before investing.

Switching gears from Datamatics Global Services, 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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