How Should Investors React To Vindhya Telelinks Limited's (NSE:VINDHYATEL) CEO Pay?

Yashwant Lodha has been the CEO of Vindhya Telelinks Limited (NSE:VINDHYATEL) since 2009. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Vindhya Telelinks

How Does Yashwant Lodha's Compensation Compare With Similar Sized Companies?

Our data indicates that Vindhya Telelinks Limited is worth ₹11b, and total annual CEO compensation was reported as ₹18m for the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at ₹15m. We looked at a group of companies with market capitalizations under ₹14b, and the median CEO total compensation was ₹3.5m.

Thus we can conclude that Yashwant Lodha receives more in total compensation than the median of a group of companies in the same market, and of similar size to Vindhya Telelinks Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Vindhya Telelinks has changed from year to year.

Is Vindhya Telelinks Limited Growing?

Vindhya Telelinks Limited has increased its earnings per share (EPS) by an average of 22% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 6.1%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Vindhya Telelinks Limited Been A Good Investment?

Most shareholders would probably be pleased with Vindhya Telelinks Limited for providing a total return of 50% 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...

We examined the amount Vindhya Telelinks Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Vindhya Telelinks (free visualization of insider trades).

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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