How Much Is Newgen Software Technologies Limited (NSE:NEWGEN) CEO Getting Paid?

This article will reflect on the compensation paid to Diwakar Nigam who has served as CEO of Newgen Software Technologies Limited (NSE:NEWGEN) since 2015. This analysis will also assess whether Newgen Software Technologies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Newgen Software Technologies

Comparing Newgen Software Technologies Limited's CEO Compensation With the industry

Our data indicates that Newgen Software Technologies Limited has a market capitalization of ₹20b, and total annual CEO compensation was reported as ₹28m for the year to March 2020. That's a notable increase of 60% on last year. We note that the salary portion, which stands at ₹20.3m constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from ₹7.3b to ₹29b, we found that the median CEO total compensation was ₹28m. So it looks like Newgen Software Technologies compensates Diwakar Nigam in line with the median for the industry. What's more, Diwakar Nigam holds ₹5.3b 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. In Newgen Software Technologies' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Newgen Software Technologies Limited's Growth Numbers

Newgen Software Technologies Limited has seen its earnings per share (EPS) increase by 13% a year over the past three years. In the last year, its revenue is down 1.5%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Newgen Software Technologies Limited Been A Good Investment?

With a total shareholder return of 23% over three years, Newgen Software Technologies Limited shareholders would, in general, 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...

As we noted earlier, Newgen Software Technologies pays its CEO in line with similar-sized companies belonging to the same industry. However, it's admirable that over the last three years, EPS growth for the company has been impressive, though the same can't be said for investor returns. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Newgen Software Technologies that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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