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Does Family Insights Group Limited's (ASX:FAM) CEO Pay Compare Well With Peers?

Simply Wall St

Sean Smith has been the CEO of Family Insights Group Limited (ASX:FAM) since 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.

View our latest analysis for Family Insights Group

How Does Sean Smith's Compensation Compare With Similar Sized Companies?

Our data indicates that Family Insights Group Limited is worth AU$3.6m, and total annual CEO compensation was reported as AU$515k for the year to June 2019. We note that's an increase of 113% above last year. We think total compensation is more important but we note that the CEO salary is lower, at AU$247k. We took a group of companies with market capitalizations below AU$296m, and calculated the median CEO total compensation to be AU$377k.

It would therefore appear that Family Insights Group Limited pays Sean Smith 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. 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 Family Insights Group has changed from year to year.

ASX:FAM CEO Compensation, October 12th 2019

Is Family Insights Group Limited Growing?

Over the last three years Family Insights Group Limited has grown its earnings per share (EPS) by an average of 59% per year (using a line of best fit). Its revenue is down 4.4% over last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Family Insights Group Limited Been A Good Investment?

Since shareholders would have lost about 97% over three years, some Family Insights Group Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by Family Insights Group Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. This doesn't look great when you consider CEO remuneration is up on last year. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Family Insights Group.

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 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. Thank you for reading.