We Think Shareholders May Consider Being More Generous With Tata Consultancy Services Limited's (NSE:TCS) CEO Compensation Package

Shareholders will probably not be disappointed by the robust results at Tata Consultancy Services Limited (NSE:TCS) recently and they will be keeping this in mind as they go into the AGM on 10 June 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

View our latest analysis for Tata Consultancy Services

How Does Total Compensation For Rajesh Gopinathan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Tata Consultancy Services Limited has a market capitalization of ₹12t, and reported total annual CEO compensation of ₹204m for the year to March 2021. That's a notable increase of 52% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at ₹13m.

For comparison, other companies in the industry with market capitalizations above ₹583b, reported a median total CEO compensation of ₹628m. In other words, Tata Consultancy Services pays its CEO lower than the industry median. Moreover, Rajesh Gopinathan also holds ₹8.7m worth of Tata Consultancy Services stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	₹13m	₹14m	6%
Other	₹191m	₹120m	94%
Total Compensation	₹204m	₹134m	100%

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. Tata Consultancy Services sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Tata Consultancy Services Limited's Growth Numbers

Over the past three years, Tata Consultancy Services Limited has seen its earnings per share (EPS) grow by 8.9% per year. It achieved revenue growth of 4.6% over the last year.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Tata Consultancy Services Limited Been A Good Investment?

Boasting a total shareholder return of 93% over three years, Tata Consultancy Services Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Tata Consultancy Services.

Important note: Tata Consultancy Services is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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