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Rajesh Subramaniam has been the CEO of Firstsource Solutions Limited (NSE:FSL) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.
How Does Rajesh Subramaniam's Compensation Compare With Similar Sized Companies?
Our data indicates that Firstsource Solutions Limited is worth ₹36b, and total annual CEO compensation is ₹136m. (This number is for the twelve months until March 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at ₹70m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ₹14b to ₹56b. The median total CEO compensation was ₹22m.
As you can see, Rajesh Subramaniam is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Firstsource Solutions Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Firstsource Solutions, below.
Is Firstsource Solutions Limited Growing?
Firstsource Solutions Limited has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). Its revenue is up 8.2% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.
Has Firstsource Solutions Limited Been A Good Investment?
Firstsource Solutions Limited has generated a total shareholder return of 17% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by Firstsource Solutions Limited, and compared it to remuneration at a group of 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. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Firstsource Solutions (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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.