How Much Is Tejas Networks Limited (NSE:TEJASNET) CEO Getting Paid?

Sanjay Nayak has been the CEO of Tejas Networks Limited (NSE:TEJASNET) since 2000, 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 Tejas Networks.

See our latest analysis for Tejas Networks

How Does Total Compensation For Sanjay Nayak Compare With Other Companies In The Industry?

At the time of writing, our data shows that Tejas Networks Limited has a market capitalization of ₹13b, and reported total annual CEO compensation of ₹22m for the year to March 2020. That's a fairly small increase of 6.7% over the previous year. Notably, the salary which is ₹18.1m, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from ₹7.4b to ₹29b, we found that the median CEO total compensation was ₹19m. So it looks like Tejas Networks compensates Sanjay Nayak in line with the median for the industry. Moreover, Sanjay Nayak also holds ₹349m worth of Tejas Networks stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 80% of total compensation represents salary and 20% is other remuneration. Tejas Networks is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Tejas Networks Limited's Growth Numbers

Over the last three years, Tejas Networks Limited has shrunk its earnings per share by 93% per year. In the last year, its revenue is down 53%.

Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Tejas Networks Limited Been A Good Investment?

Given the total shareholder loss of 67% over three years, many shareholders in Tejas Networks 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...

As we touched on above, Tejas Networks Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Tejas Networks that investors should be aware of in a dynamic business environment.

Switching gears from Tejas Networks, 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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