What Can We Learn About Compuage Infocom's (NSE:COMPINFO) CEO Compensation?

Atul Mehta became the CEO of Compuage Infocom Limited (NSE:COMPINFO) in 2011, and we think it's a good time to look at 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 Compuage Infocom

How Does Total Compensation For Atul Mehta Compare With Other Companies In The Industry?

Our data indicates that Compuage Infocom Limited has a market capitalization of ₹1.1b, and total annual CEO compensation was reported as ₹17m for the year to March 2020. This means that the compensation hasn't changed much from last year. Notably, the salary of ₹17m is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under ₹15b, the reported median total CEO compensation was ₹2.6m. This suggests that Atul Mehta is paid more than the median for the industry. Moreover, Atul Mehta also holds ₹254m worth of Compuage Infocom stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, all of total compensation represents salary, while non-salary remuneration is completely ignored. On a company level, Compuage Infocom prefers to reward its CEO through a salary, opting not to pay Atul Mehta through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Compuage Infocom Limited's Growth

Compuage Infocom Limited has seen its earnings per share (EPS) increase by 5.1% a year over the past three years. In the last year, its revenue is down 20%.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Compuage Infocom Limited Been A Good Investment?

With a three year total loss of 65% for the shareholders, Compuage Infocom Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Compuage Infocom rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Atul is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing for Compuage Infocom, and although EPS growth is steady, it hasn't set the world on fire. And the situation doesn't look all that good when you see Atul is remunerated higher than the industry average. Taking all this into account, it could be hard to get shareholder support for giving Atul 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. We identified 4 warning signs for Compuage Infocom (1 can't be ignored!) that you should be aware of before investing here.

Important note: Compuage Infocom 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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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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