Shareholders May Not Be So Generous With SoftTech Engineers Limited's (NSE:SOFTTECH) CEO Compensation And Here's Why

Key Insights

• SoftTech Engineers' Annual General Meeting to take place on 28th of September
• CEO Vijay Gupta's total compensation includes salary of ₹2.43m
• Total compensation is 52% above industry average
• Over the past three years, SoftTech Engineers' EPS fell by 20% and over the past three years, the total shareholder return was 178%

CEO Vijay Gupta has done a decent job of delivering relatively good performance at SoftTech Engineers Limited (NSE:SOFTTECH) recently. As shareholders go into the upcoming AGM on 28th of September, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for SoftTech Engineers

Comparing SoftTech Engineers Limited's CEO Compensation With The Industry

Our data indicates that SoftTech Engineers Limited has a market capitalization of ₹1.8b, and total annual CEO compensation was reported as ₹8.1m for the year to March 2023. Notably, that's an increase of 35% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹2.4m.

In comparison with other companies in the Indian Software industry with market capitalizations under ₹17b, the reported median total CEO compensation was ₹5.3m. Hence, we can conclude that Vijay Gupta is remunerated higher than the industry median. Moreover, Vijay Gupta also holds ₹664m worth of SoftTech Engineers stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 97% of total compensation represents salary and 3% is other remuneration. In SoftTech Engineers' case, non-salary compensation represents a greater slice of total remuneration, 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.

SoftTech Engineers Limited's Growth

SoftTech Engineers Limited has reduced its earnings per share by 20% a year over the last three years. Its revenue is up 23% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 SoftTech Engineers Limited Been A Good Investment?

Most shareholders would probably be pleased with SoftTech Engineers Limited for providing a total return of 178% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The overall company performance has been commendable, however there are still areas for improvement. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

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 SoftTech Engineers (1 is concerning!) that you should be aware of before investing here.

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.