Tera Software Limited's (NSE:TERASOFT) CEO Compensation Is Looking A Bit Stretched At The Moment

Key Insights

• Tera Software's Annual General Meeting to take place on 26th of September
• Total pay for CEO Gopichand Tummala includes ₹10.8m salary
• Total compensation is 189% above industry average
• Tera Software's EPS grew by 73% over the past three years while total shareholder return over the past three years was 789%

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CEO Gopichand Tummala has done a decent job of delivering relatively good performance at Tera Software Limited (NSE:TERASOFT) recently. As shareholders go into the upcoming AGM on 26th 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.

Check out our latest analysis for Tera Software

How Does Total Compensation For Gopichand Tummala Compare With Other Companies In The Industry?

According to our data, Tera Software Limited has a market capitalization of ₹5.6b, and paid its CEO total annual compensation worth ₹11m over the year to March 2025. That's a fairly small increase of 3.8% over the previous year. It is worth noting that the CEO compensation consists entirely of the salary, worth ₹11m.

In comparison with other companies in the Indian IT industry with market capitalizations under ₹18b, the reported median total CEO compensation was ₹3.7m. This suggests that Gopichand Tummala is paid more than the median for the industry. Furthermore, Gopichand Tummala directly owns ₹637m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. At the company level, Tera Software pays Gopichand Tummala solely through a salary, preferring to go down a conventional route. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Tera Software Limited's Growth

Tera Software Limited has seen its earnings per share (EPS) increase by 73% a year over the past three years. In the last year, its revenue is up 29%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Tera Software Limited Been A Good Investment?

Most shareholders would probably be pleased with Tera Software Limited for providing a total return of 789% 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...

Tera Software rewards its CEO solely through a salary, ignoring non-salary benefits completely. The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Tera Software that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.