Increases to Mphasis Limited's (NSE:MPHASIS) CEO Compensation Might Cool off for now

Key Insights

• Mphasis' Annual General Meeting to take place on 25th of July
• Total pay for CEO Nitin Rakesh includes ₹124.0m salary
• The overall pay is 389% above the industry average
• Over the past three years, Mphasis' EPS grew by 8.0% and over the past three years, the total shareholder return was 29%

Under the guidance of CEO Nitin Rakesh, Mphasis Limited (NSE:MPHASIS) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 25th of July. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for Mphasis

How Does Total Compensation For Nitin Rakesh Compare With Other Companies In The Industry?

At the time of writing, our data shows that Mphasis Limited has a market capitalization of ₹536b, and reported total annual CEO compensation of ₹441m for the year to March 2024. That's a notable decrease of 25% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹124m.

On examining similar-sized companies in the Indian IT industry with market capitalizations between ₹335b and ₹1.0t, we discovered that the median CEO total compensation of that group was ₹90m. This suggests that Nitin Rakesh is paid more than the median for the industry. Furthermore, Nitin Rakesh directly owns ₹423m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	₹124m	₹52m	28%
Other	₹317m	₹539m	72%
Total Compensation	₹441m	₹592m	100%

On an industry level, around 97% of total compensation represents salary and 3% is other remuneration. It's interesting to note that Mphasis allocates a smaller portion of compensation to salary in comparison to the broader 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 Mphasis Limited's Growth Numbers

Over the past three years, Mphasis Limited has seen its earnings per share (EPS) grow by 8.0% per year. Its revenue is down 3.8% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPS growth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Mphasis Limited Been A Good Investment?

Mphasis Limited has generated a total shareholder return of 29% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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 1 warning sign for Mphasis that investors should think about before committing capital to this stock.

Important note: Mphasis 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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com