Is Engenco Limited's (ASX:EGN) CEO Pay Fair?
Kevin Pallas has been the CEO of Engenco Limited (ASX:EGN) since 2015. 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. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Engenco
How Does Kevin Pallas's Compensation Compare With Similar Sized Companies?
According to our data, Engenco Limited has a market capitalization of AU$157m, and pays its CEO total annual compensation worth AU$513k. (This figure is for the year to June 2019). That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at AU$411k. We examined a group of similar sized companies, with market capitalizations of below AU$292m. The median CEO total compensation in that group is AU$362k.
As you can see, Kevin Pallas is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Engenco Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Engenco has changed over time.
Is Engenco Limited Growing?
Over the last three years Engenco Limited has grown its earnings per share (EPS) by an average of 52% per year (using a line of best fit). Its revenue is up 11% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Engenco Limited Been A Good Investment?
Boasting a total shareholder return of 238% over three years, Engenco Limited has done well by shareholders. 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.
In Summary...
We compared total CEO remuneration at Engenco 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. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Engenco.
If you want to buy a stock that is better than Engenco, this free list of high return, low debt companies is a great place to look.
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.
