Nitin Rakesh became the CEO of Mphasis Limited (NSE:MPHASIS) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Mphasis

How Does Nitin Rakesh's Compensation Compare With Similar Sized Companies?

Our data indicates that Mphasis Limited is worth ₹173b, and total annual CEO compensation is ₹121m. (This is based on the year to March 2019). Notably, that's an increase of 40% over the year before. While we always look at total compensation first, we note that the salary component is less, at ₹51m. We examined companies with market caps from ₹139b to ₹446b, and discovered that the median CEO total compensation of that group was ₹49m.

As you can see, Nitin Rakesh is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Mphasis Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

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

Is Mphasis Limited Growing?

On average over the last three years, Mphasis Limited has grown earnings per share (EPS) by 19% each year (using a line of best fit). In the last year, its revenue is up 17%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.

Has Mphasis Limited Been A Good Investment?

I think that the total shareholder return of 91%, over three years, would leave most Mphasis Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We compared total CEO remuneration at Mphasis Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying Mphasis shares with their own money (free access).

Important note: Mphasis may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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