Is Tanla Solutions Limited’s (NSE:TANLA) CEO Overpaid Relative To Its Peers?

Dasari Uday Reddy has been the CEO of Tanla Solutions Limited (NSE:TANLA) since 1999. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Tanla Solutions

How Does Dasari Uday Reddy’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Tanla Solutions Limited has a market cap of ₹4.2b, and is paying total annual CEO compensation of ₹13m. (This number is for the twelve months until March 2018). Notably, the salary of ₹13m is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below ₹14b, and calculated the median CEO total compensation to be ₹1.2m.

Thus we can conclude that Dasari Uday Reddy receives more in total compensation than the median of a group of companies in the same market, and of similar size to Tanla Solutions Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Tanla Solutions, below.

NSEI:TANLA CEO Compensation, March 25th 2019
NSEI:TANLA CEO Compensation, March 25th 2019

Is Tanla Solutions Limited Growing?

Tanla Solutions Limited saw earnings per share stay pretty flat over the last three years, albeit with a slight positive trend. Its revenue is up 17% over last year.

This revenue growth could really point to a brighter future. And the improvement in earnings per share is modest but respectable. Although we’ll stop short of calling the stock a top performer, we think the company has potential. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Tanla Solutions Limited Been A Good Investment?

With a total shareholder return of 2.6% over three years, Tanla Solutions Limited has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

We examined the amount Tanla Solutions Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

We generally prefer to see stronger EPS growth, and we’re not particularly impressed with the total shareholder return, over the last three years. Considering this, we wouldn’t want to see any big pay rises, although we’d stop short of calling the CEO compensation unfair. So you may want to check if insiders are buying Tanla Solutions shares with their own money (free access).

If you want to buy a stock that is better than Tanla Solutions, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.