Darren Pateman has been the CEO of Finbar Group Limited (ASX:FRI) since 2010. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Darren Pateman's Compensation Compare With Similar Sized Companies?
Our data indicates that Finbar Group Limited is worth AU$231m, and total annual CEO compensation is AU$980k. (This number is for the twelve months until June 2019). That's less than last year. While we always look at total compensation first, we note that the salary component is less, at AU$670k. When we examined a selection of companies with market caps ranging from AU$147m to AU$586m, we found the median CEO total compensation was AU$713k.
It would therefore appear that Finbar Group Limited pays Darren Pateman 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 get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Finbar Group has changed from year to year.
Is Finbar Group Limited Growing?
Finbar Group Limited has increased its earnings per share (EPS) by an average of 42% a year, over the last three years (using a line of best fit). Its revenue is up 2.6% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Finbar Group Limited Been A Good Investment?
Finbar Group Limited has generated a total shareholder return of 19% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
We compared total CEO remuneration at Finbar Group Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. 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 Finbar Group (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.
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