Tom Cregan has been the CEO of EML Payments Limited (ASX:EML) since 2012. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Tom Cregan's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that EML Payments Limited has a market cap of AU$1.5b, and reported total annual CEO compensation of AU$2.7m for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$629k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from AU$575m to AU$2.3b, and the median CEO total compensation was AU$1.4m.
It would therefore appear that EML Payments Limited pays Tom Cregan 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.
The graphic below shows how CEO compensation at EML Payments has changed from year to year.
Is EML Payments Limited Growing?
Over the last three years EML Payments Limited has grown its earnings per share (EPS) by an average of 105% per year (using a line of best fit). It achieved revenue growth of 37% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.
Has EML Payments Limited Been A Good Investment?
I think that the total shareholder return of 153%, over three years, would leave most EML Payments Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We compared total CEO remuneration at EML Payments Limited with the amount paid at companies with a similar market capitalization. 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. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if EML Payments insiders are buying or selling shares.
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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