Is Beam Communications Holdings Limited's (ASX:BCC) CEO Paid At A Competitive Rate?
In 2008, Michael Capocchi was appointed CEO of Beam Communications Holdings Limited (ASX:BCC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Beam Communications Holdings
How Does Michael Capocchi's Compensation Compare With Similar Sized Companies?
According to our data, Beam Communications Holdings Limited has a market capitalization of AU$9.0m, and paid its CEO total annual compensation worth AU$736k over the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$419k. We examined a group of similar sized companies, with market capitalizations of below AU$309m. The median CEO total compensation in that group is AU$390k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Beam Communications Holdings. Talking in terms of the sector, salary represented approximately 63% of total compensation out of all the companies we analysed, while other remuneration made up 37% of the pie. Our data reveals that Beam Communications Holdings allocates salary in line with the wider market.
It would therefore appear that Beam Communications Holdings Limited pays Michael Capocchi more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see, below, how CEO compensation at Beam Communications Holdings has changed over time.
Is Beam Communications Holdings Limited Growing?
Over the last three years Beam Communications Holdings Limited has seen earnings per share (EPS) move in a positive direction by an average of 36% per year (using a line of best fit). In the last year, its revenue is down 11%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Beam Communications Holdings Limited Been A Good Investment?
Beam Communications Holdings Limited has generated a total shareholder return of 3.0% over three years, so most shareholders wouldn't be too disappointed. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
We compared the total CEO remuneration paid by Beam Communications Holdings Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. On another note, Beam Communications Holdings has 3 warning signs (and 2 which don't sit too well with us) we think you should know about.
If you want to buy a stock that is better than Beam Communications Holdings, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.
