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Shareholders may be wondering what CEO Chris Noone plans to do to improve the less than great performance at Carly Holdings Limited (ASX:CL8) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 18 November 2021. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
Comparing Carly Holdings Limited's CEO Compensation With the industry
Our data indicates that Carly Holdings Limited has a market capitalization of AU$5.7m, and total annual CEO compensation was reported as AU$362k for the year to June 2021. Notably, that's an increase of 48% over the year before. In particular, the salary of AU$225.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below AU$272m, reported a median total CEO compensation of AU$530k. This suggests that Chris Noone is paid below the industry median.
Talking in terms of the industry, salary represented approximately 48% of total compensation out of all the companies we analyzed, while other remuneration made up 52% of the pie. Carly Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Carly Holdings Limited's Growth
Over the past three years, Carly Holdings Limited has seen its earnings per share (EPS) grow by 9.9% per year. It saw its revenue drop 17% over the last year.
We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Carly Holdings Limited Been A Good Investment?
The return of -85% over three years would not have pleased Carly Holdings Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
The fact that shareholders have earned a negative share price return is certainly disconcerting. The disappointing performance may have something to do with the flat earnings growth. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for Carly Holdings you should be aware of, and 4 of them are a bit concerning.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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