Increases to Intense Technologies Limited's (NSE:INTENTECH) CEO Compensation Might Cool off for now

Key Insights

• Intense Technologies' Annual General Meeting to take place on 29th of September
• Salary of ₹8.27m is part of CEO Chidella Shastri's total remuneration
• The overall pay is 203% above the industry average
• Intense Technologies' total shareholder return over the past three years was 189% while its EPS was down 7.8% over the past three years

The share price of Intense Technologies Limited (NSE:INTENTECH) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. The upcoming AGM on 29th of September may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Intense Technologies

How Does Total Compensation For Chidella Shastri Compare With Other Companies In The Industry?

According to our data, Intense Technologies Limited has a market capitalization of ₹2.0b, and paid its CEO total annual compensation worth ₹17m over the year to March 2023. That's a slight decrease of 4.7% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at ₹8.3m.

On comparing similar-sized companies in the Indian Software industry with market capitalizations below ₹17b, we found that the median total CEO compensation was ₹5.5m. Hence, we can conclude that Chidella Shastri is remunerated higher than the industry median. Moreover, Chidella Shastri also holds ₹145m worth of Intense Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 99% of total compensation represents salary, while the remainder of 1% is other remuneration. Intense Technologies pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Intense Technologies Limited's Growth Numbers

Over the last three years, Intense Technologies Limited has shrunk its earnings per share by 7.8% per year. It achieved revenue growth of 13% over the last year.

The decline in EPS is a bit concerning. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Intense Technologies Limited Been A Good Investment?

Boasting a total shareholder return of 189% over three years, Intense Technologies Limited has done well by shareholders. 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...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 3 warning signs for Intense Technologies that you should be aware of before investing.

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.