Hinduja Global Solutions Limited's (NSE:HGS) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Hinduja Global Solutions' Annual General Meeting to take place on 27th of September
• Salary of ₹7.25m is part of CEO Partha DeSarkar's total remuneration
• The overall pay is 74% above the industry average
• Hinduja Global Solutions' three-year loss to shareholders was 31% while its EPS was down 47% over the past three years

The results at Hinduja Global Solutions Limited (NSE:HGS) have been quite disappointing recently and CEO Partha DeSarkar 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 September. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Hinduja Global Solutions

How Does Total Compensation For Partha DeSarkar Compare With Other Companies In The Industry?

At the time of writing, our data shows that Hinduja Global Solutions Limited has a market capitalization of ₹42b, and reported total annual CEO compensation of ₹21m for the year to March 2024. That's a notable decrease of 36% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹7.2m.

In comparison with other companies in the Indian IT industry with market capitalizations ranging from ₹17b to ₹67b, the reported median CEO total compensation was ₹12m. Hence, we can conclude that Partha DeSarkar is remunerated higher than the industry median. Moreover, Partha DeSarkar also holds ₹545k worth of Hinduja Global Solutions stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2024	2023	Proportion (2024)
Salary	₹7.2m	₹18m	34%
Other	₹14m	₹16m	66%
Total Compensation	₹21m	₹34m	100%

Talking in terms of the industry, salary represented approximately 93% of total compensation out of all the companies we analyzed, while other remuneration made up 7% of the pie. Hinduja Global Solutions sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Hinduja Global Solutions Limited's Growth

Over the last three years, Hinduja Global Solutions Limited has shrunk its earnings per share by 47% per year. In the last year, its revenue is up 1.9%.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Hinduja Global Solutions Limited Been A Good Investment?

The return of -31% over three years would not have pleased Hinduja Global Solutions Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Hinduja Global Solutions (1 doesn't sit too well with us!) that you should be aware of before investing here.

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.

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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.