What Can We Make Of R S Software (India)'s (NSE:RSSOFTWARE) CEO Compensation?
The CEO of R S Software (India) Limited (NSE:RSSOFTWARE) is Raj Jain, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for R S Software (India).
Check out our latest analysis for R S Software (India)
How Does Total Compensation For Raj Jain Compare With Other Companies In The Industry?
According to our data, R S Software (India) Limited has a market capitalization of ā¹602m, and paid its CEO total annual compensation worth ā¹6.0m over the year to March 2020. That is, the compensation was roughly the same as last year. In particular, the salary of ā¹5.40m, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below ā¹15b, reported a median total CEO compensation of ā¹4.8m. So it looks like R S Software (India) compensates Raj Jain in line with the median for the industry. Moreover, Raj Jain also holds ā¹260m worth of R S Software (India) stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | ā¹5.4m | ā¹3.6m | 89% |
| Other | ā¹639k | ā¹2.4m | 11% |
| Total Compensation | ā¹6.0m | ā¹6.0m | 100% |
Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. In R S Software (India)'s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
R S Software (India) Limited's Growth
R S Software (India) Limited has reduced its earnings per share by 41% a year over the last three years. It saw its revenue drop 29% over the last year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 R S Software (India) Limited Been A Good Investment?
With a three year total loss of 71% for the shareholders, R S Software (India) Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As previously discussed, Raj is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for R S Software (India) (3 are potentially serious!) that you should be aware of before investing here.
Switching gears from R S Software (India), if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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About NSEI:RSSOFTWARE
R S Software (India)
Provides software solutions to electronic payment industries in India, the United States, the United Kingdom, and Japan.
Flawless balance sheet with acceptable track record.
