What We Learned About InfoBeans Technologies' (NSE:INFOBEAN) CEO Compensation

This article will reflect on the compensation paid to Siddharth Sethi who has served as CEO of InfoBeans Technologies Limited (NSE:INFOBEAN) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for InfoBeans Technologies.

View our latest analysis for InfoBeans Technologies

Comparing InfoBeans Technologies Limited's CEO Compensation With the industry

At the time of writing, our data shows that InfoBeans Technologies Limited has a market capitalization of ₹3.5b, and reported total annual CEO compensation of ₹7.0m for the year to March 2020. That is, the compensation was roughly the same as last year. Notably, the salary of ₹7.0m is the entirety of the CEO compensation.

On comparing similar-sized companies in the industry with market capitalizations below ₹15b, we found that the median total CEO compensation was ₹5.0m. This suggests that Siddharth Sethi is paid more than the median for the industry. What's more, Siddharth Sethi holds ₹846m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

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. Speaking on a company level, InfoBeans Technologies prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at InfoBeans Technologies Limited's Growth Numbers

InfoBeans Technologies Limited has seen its earnings per share (EPS) increase by 13% a year over the past three years. It achieved revenue growth of 34% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has InfoBeans Technologies Limited Been A Good Investment?

We think that the total shareholder return of 82%, over three years, would leave most InfoBeans Technologies 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.

In Summary...

InfoBeans Technologies pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Siddharth is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But EPS growth and shareholder returns have been top-notch for the past three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. Given the strong history of shareholder returns, the shareholders are probably very happy with Siddharth's performance.

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 InfoBeans Technologies that you should be aware of before investing.

Important note: InfoBeans Technologies is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.
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