Increases to CEO Compensation Might Be Put On Hold For Now at DRC Systems India Limited (NSE:DRCSYSTEMS)

Key Insights

• DRC Systems India's Annual General Meeting to take place on 17th of September
• Total pay for CEO Hiten Barchha includes ₹6.50m salary
• Total compensation is 35% above industry average
• Over the past three years, DRC Systems India's EPS grew by 598% and over the past three years, the total shareholder return was 185%

Performance at DRC Systems India Limited (NSE:DRCSYSTEMS) has been reasonably good and CEO Hiten Barchha has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 17th of September. However, some shareholders may still want to keep CEO compensation within reason.

Check out our latest analysis for DRC Systems India

Comparing DRC Systems India Limited's CEO Compensation With The Industry

According to our data, DRC Systems India Limited has a market capitalization of ₹3.4b, and paid its CEO total annual compensation worth ₹6.5m over the year to March 2024. We note that's an increase of 27% above last year. Notably, the salary of ₹6.5m is the entirety of the CEO compensation.

For comparison, other companies in the Indian Software industry with market capitalizations below ₹17b, reported a median total CEO compensation of ₹4.8m. This suggests that Hiten Barchha is paid more than the median for the industry. Furthermore, Hiten Barchha directly owns ₹70m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹6.5m	₹5.1m	100%
Other	-	-	-
Total Compensation	₹6.5m	₹5.1m	100%

On an industry level, it's fascinating to see that all of total compensation represents salary and non-salary benefits do not factor into the equation at all. On a company level, DRC Systems India prefers to reward its CEO through a salary, opting not to pay Hiten Barchha through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

DRC Systems India Limited's Growth

DRC Systems India Limited's earnings per share (EPS) grew 598% per year over the last three years. Its revenue is up 98% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has DRC Systems India Limited Been A Good Investment?

We think that the total shareholder return of 185%, over three years, would leave most DRC Systems India Limited 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.

To Conclude...

DRC Systems India rewards its CEO solely through a salary, ignoring non-salary benefits completely. Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

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. We did our research and spotted 2 warning signs for DRC Systems India that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.