In 2016 Yakov Temov was appointed CEO of Connected IO Limited (ASX:CIO). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Yakov Temov's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Connected IO Limited has a market cap of AU$8.4m, and reported total annual CEO compensation of AU$190k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$181k. We looked at a group of companies with market capitalizations under AU$289m, and the median CEO total compensation was AU$379k.
A first glance this seems like a real positive for shareholders, since Yakov Temov is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Connected IO has changed over time.
Is Connected IO Limited Growing?
On average over the last three years, Connected IO Limited has grown earnings per share (EPS) by 36% each year (using a line of best fit). Its revenue is up 56% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Connected IO Limited Been A Good Investment?
With a three year total loss of 83%, Connected IO Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It looks like Connected IO Limited pays its CEO less than similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we don't think, Yakov Temov is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. Whatever your view on compensation, you might want to check if insiders are buying or selling Connected IO shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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