How Should Investors Feel About I Synergy Group's (ASX:IS3) CEO Remuneration?
This article will reflect on the compensation paid to Lawrence Teo who has served as CEO of I Synergy Group Limited (ASX:IS3) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for I Synergy Group.
Check out our latest analysis for I Synergy Group
Comparing I Synergy Group Limited's CEO Compensation With the industry
According to our data, I Synergy Group Limited has a market capitalization of AU$8.2m, and paid its CEO total annual compensation worth AU$254k over the year to December 2019. Notably, that's a decrease of 12% over the year before. In particular, the salary of AU$189.4k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$271m, the reported median total CEO compensation was AU$323k. This suggests that I Synergy Group remunerates its CEO largely in line with the industry average. What's more, Lawrence Teo holds AU$3.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | AU$189k | AU$162k | 75% |
Other | AU$64k | AU$125k | 25% |
Total Compensation | AU$254k | AU$287k | 100% |
Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. It's interesting to note that I Synergy Group pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
I Synergy Group Limited's Growth
Over the last three years, I Synergy Group Limited has shrunk its earnings per share by 97% per year. Its revenue is down 2.7% over the previous year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 I Synergy Group Limited Been A Good Investment?
Given the total shareholder loss of 68% over three years, many shareholders in I Synergy Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we noted earlier, I Synergy Group pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 3 warning signs for I Synergy Group that investors should look into moving forward.
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. 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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