What Did Infosys' (NSE:INFY) CEO Take Home Last Year?

Salil Parekh has been the CEO of Infosys Limited (NSE:INFY) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Infosys.

Check out our latest analysis for Infosys

Comparing Infosys Limited's CEO Compensation With the industry

According to our data, Infosys Limited has a market capitalization of ₹4.9t, and paid its CEO total annual compensation worth US$6.2m over the year to March 2020. We note that's an increase of 27% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$801k.

On comparing similar companies in the industry with market capitalizations above ₹590b, we found that the median total CEO compensation was US$9.0m. This suggests that Salil Parekh is paid below the industry median. What's more, Salil Parekh holds ₹504m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represents all of total compensation among the companies we analyzed, while other remuneration is, interestingly, completely ignored. Infosys sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Infosys Limited's Growth Numbers

Infosys Limited has seen its earnings per share (EPS) increase by 5.8% a year over the past three years. In the last year, its revenue is up 3.9%.

We'd prefer higher revenue growth, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Infosys Limited Been A Good Investment?

Boasting a total shareholder return of 151% over three years, Infosys Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As previously discussed, Salil is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, shareholder returns are rock solid over the past three years, and that’s undoubtedly a good sign. As a result of the juicy return to investors, CEO compensation may well be quite reasonable.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Infosys that investors should think about before committing capital to this stock.

Important note: Infosys 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.

If you decide to trade Infosys, 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.