How Much Is Tata Consultancy Services' (NSE:TCS) CEO Getting Paid?

Rajesh Gopinathan has been the CEO of Tata Consultancy Services Limited (NSE:TCS) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Tata Consultancy Services.

Check out our latest analysis for Tata Consultancy Services

Comparing Tata Consultancy Services Limited's CEO Compensation With the industry

At the time of writing, our data shows that Tata Consultancy Services Limited has a market capitalization of ₹11t, and reported total annual CEO compensation of ₹134m for the year to March 2020. That's a notable decrease of 17% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at ₹14m.

For comparison, other companies in the industry with market capitalizations above ₹589b, reported a median total CEO compensation of ₹184m. From this we gather that Rajesh Gopinathan is paid around the median for CEOs in the industry. Furthermore, Rajesh Gopinathan directly owns ₹8.1m worth of shares in the company, implying that they are deeply invested in the company's success.

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. It's interesting to note that Tata Consultancy Services allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Tata Consultancy Services Limited's Growth Numbers

Tata Consultancy Services Limited has seen its earnings per share (EPS) increase by 7.4% a year over the past three years. Its revenue is up 3.8% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Tata Consultancy Services Limited Been A Good Investment?

Most shareholders would probably be pleased with Tata Consultancy Services Limited for providing a total return of 137% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As previously discussed, Rajesh is compensated close to the median for companies of its size, and which belong to the same industry. But the business isn't reporting great numbers in terms of EPS growth. On the other hand, shareholder returns over the same period have been very healthy. We would like to see EPS growth from the business, although we wouldn't say the CEO compensation is high.

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 Tata Consultancy Services that investors should think about before committing capital to this stock.

Switching gears from Tata Consultancy Services, 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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