Increases to CEO Compensation Might Be Put On Hold For Now at Centrex Limited (ASX:CXM)
Key Insights
Centrex will host its Annual General Meeting on 29th of November
Total pay for CEO Robert Mencel includes AU$455.3k salary
Total compensation is 131% above industry average
Centrex's total shareholder return over the past three years was 128% while its EPS grew by 19% over the past three years
Performance at Centrex Limited (ASX:CXM) has been reasonably good and CEO Robert Mencel has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29th of November. However, some shareholders may still want to keep CEO compensation within reason.
Check out our latest analysis for Centrex
How Does Total Compensation For Robert Mencel Compare With Other Companies In The Industry?
According to our data, Centrex Limited has a market capitalization of AU$45m, and paid its CEO total annual compensation worth AU$890k over the year to June 2023. That's a notable increase of 76% on last year. In particular, the salary of AU$455.3k, makes up a fairly large portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the Australian Metals and Mining industry with market capitalizations below AU$305m, we found that the median total CEO compensation was AU$384k. This suggests that Robert Mencel is paid more than the median for the industry. Furthermore, Robert Mencel directly owns AU$145k worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$455k | AU$395k | 51% |
Other | AU$435k | AU$111k | 49% |
Total Compensation | AU$890k | AU$506k | 100% |
Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. It's interesting to note that Centrex allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Centrex Limited's Growth Numbers
Centrex Limited has seen its earnings per share (EPS) increase by 19% a year over the past three years. It achieved revenue growth of 12,034% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Centrex Limited Been A Good Investment?
Most shareholders would probably be pleased with Centrex Limited for providing a total return of 128% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Centrex (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Centrex, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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.
