In 2014 Chris Noone was appointed CEO of Collaborate Corporation Limited (ASX:CL8). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Chris Noone's Compensation Compare With Similar Sized Companies?
According to our data, Collaborate Corporation Limited has a market capitalization of AU$10m, and paid its CEO total annual compensation worth AU$268k over the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$225k. We looked at a group of companies with market capitalizations under AU$341m, and the median CEO total compensation was AU$397k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 41% of total compensation represents salary, while the remainder of 59% is other remuneration. According to our research, Collaborate has allocated a higher percentage of pay to salary in comparison to the broader sector.
Most shareholders would consider it a positive that Chris Noone takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. You can see a visual representation of the CEO compensation at Collaborate, below.
Is Collaborate Corporation Limited Growing?
Over the last three years Collaborate Corporation Limited has grown its earnings per share (EPS) by an average of 4.0% per year (using a line of best fit). Its revenue is down 11% over last year.
I generally like to see a little revenue growth, but the improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Collaborate Corporation Limited Been A Good Investment?
Given the total loss of 63% over three years, many shareholders in Collaborate Corporation Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Collaborate Corporation Limited is currently paying its CEO below what is normal for companies of its size.
Chris Noone receives relatively low remuneration compared to similar sized companies. But the company isn't exactly firing on all cylinders, and returns over three years are not good. So while shareholders shouldn't be overly concerned about CEO compensation, they would probably like to see improved shareholder returns before seeing a pay increase. CEO compensation is an important area to keep your eyes on, but we've also identified 6 warning signs for Collaborate (3 are a bit concerning!) that you should be aware of before investing here.
If you want to buy a stock that is better than Collaborate, this free list of high return, low debt companies is a great place to look.
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