U.S. Markets close in 1 hr 4 mins

How Should Investors Feel About Electro Optic Systems Holdings Limited's (ASX:EOS) CEO Pay?

Simply Wall St

Ben Greene is the CEO of Electro Optic Systems Holdings Limited (ASX:EOS). First, this article will compare CEO compensation with compensation at similar sized companies. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Electro Optic Systems Holdings

How Does Ben Greene's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Electro Optic Systems Holdings Limited has a market cap of AU$451m, and is paying total annual CEO compensation of AU$972k. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at AU$453k. When we examined a selection of companies with market caps ranging from AU$297m to AU$1.2b, we found the median CEO total compensation was AU$1.0m.

So Ben Greene is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Electro Optic Systems Holdings has changed over time.

ASX:EOS CEO Compensation, September 2nd 2019

Is Electro Optic Systems Holdings Limited Growing?

Electro Optic Systems Holdings Limited has increased its earnings per share (EPS) by an average of 65% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 123%.

This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Electro Optic Systems Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Electro Optic Systems Holdings Limited for providing a total return of 277% 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.

In Summary...

Ben Greene is paid around what is normal the leaders of comparable size companies.

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying Electro Optic Systems Holdings shares with their own money (free access).

Important note: Electro Optic Systems Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.