How Much Does Tera Software's (NSE:TERASOFT) CEO Make?

The CEO of Tera Software Limited (NSE:TERASOFT) is Gopi Tummala, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Tera Software

Comparing Tera Software Limited's CEO Compensation With the industry

At the time of writing, our data shows that Tera Software Limited has a market capitalization of ₹651m, and reported total annual CEO compensation of ₹8.4m for the year to March 2020. That is, the compensation was roughly the same as last year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹8.4m.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹3.0m. Accordingly, our analysis reveals that Tera Software Limited pays Gopi Tummala north of the industry median. Furthermore, Gopi Tummala directly owns ₹147m 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. Speaking on a company level, Tera Software prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Tera Software Limited's Growth Numbers

Over the last three years, Tera Software Limited has not seen its earnings per share change much, though there is a slight positive movement. Revenue was pretty flat on last year.

We'd prefer higher revenue growth, 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Tera Software Limited Been A Good Investment?

Given the total shareholder loss of 23% over three years, many shareholders in Tera Software Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Tera Software rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Gopi is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. And the situation doesn't look all that good when you see Gopi is remunerated higher than the industry average. Taking all this into account, it could be hard to get shareholder support for giving Gopi a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for Tera Software you should be aware of, and 3 of them are a bit unpleasant.

Switching gears from Tera Software, 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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