A Quick Analysis On Innovana Thinklabs' (NSE:INNOVANA) CEO Compensation

Chandan Garg became the CEO of Innovana Thinklabs Limited (NSE:INNOVANA) in 2017, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Innovana Thinklabs

How Does Total Compensation For Chandan Garg Compare With Other Companies In The Industry?

According to our data, Innovana Thinklabs Limited has a market capitalization of ₹846m, and paid its CEO total annual compensation worth ₹12m over the year to March 2020. Notably, that's an increase of 49% over the year before. Notably, the salary of ₹12m 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. Accordingly, our analysis reveals that Innovana Thinklabs Limited pays Chandan Garg north of the industry median. Moreover, Chandan Garg also holds ₹602m worth of Innovana Thinklabs stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

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. At the company level, Innovana Thinklabs pays Chandan Garg solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Innovana Thinklabs Limited's Growth Numbers

Innovana Thinklabs Limited has seen its earnings per share (EPS) increase by 128% a year over the past three years. Its revenue is up 42% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Innovana Thinklabs Limited Been A Good Investment?

We think that the total shareholder return of 146%, over three years, would leave most Innovana Thinklabs Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Innovana Thinklabs rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, Innovana Thinklabs Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, Innovana Thinklabs has produced strong EPS growth and shareholder returns over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Chandan deserves a raise!

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Innovana Thinklabs (1 doesn't sit too well with us!) that you should be aware of before investing here.

Important note: Innovana Thinklabs 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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