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Is Euroz Limited's (ASX:EZL) CEO Pay Justified?

Simply Wall St

The CEO of Euroz Limited (ASX:EZL) is Andrew McKenzie. 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. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Euroz

How Does Andrew McKenzie's Compensation Compare With Similar Sized Companies?

Our data indicates that Euroz Limited is worth AU$173m, and total annual CEO compensation was reported as AU$692k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$243k. 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 examined a group of similar sized companies, with market capitalizations of below AU$292m. The median CEO total compensation in that group is AU$381k.

As you can see, Andrew McKenzie is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Euroz Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Euroz, below.

ASX:EZL CEO Compensation, January 22nd 2020

Is Euroz Limited Growing?

Euroz Limited has increased its earnings per share (EPS) by an average of 1.3% a year, over the last three years (using a line of best fit). Its revenue is down 30% over last year.

I would argue that the lack of revenue growth in the last year is less than ideal, but I'm happy with the EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Euroz Limited Been A Good Investment?

Euroz Limited has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We compared the total CEO remuneration paid by Euroz 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.

Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. So it's certainly hard to argue that the CEO is modestly paid, although we don't see the remuneration as an issue. Shareholders may want to check for free if Euroz insiders are buying or selling shares.

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.

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.

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. Thank you for reading.