Tony Falkenstein is the CEO of Just Life Group Limited (NZSE:JLG). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Tony Falkenstein's Compensation Compare With Similar Sized Companies?
According to our data, Just Life Group Limited has a market capitalization of NZ$41m, and paid its CEO total annual compensation worth NZ$220k over the year to June 2019. We examined a group of similar sized companies, with market capitalizations of below NZ$335m. The median CEO total compensation in that group is NZ$587k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. When we boil it down to the company level, Just Life Group prefers to reward Tony Falkenstein through non-salary compensation, since it does not pay a salary.
At first glance this seems like a real positive for shareholders, since Tony Falkenstein is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance. The graphic below shows how CEO compensation at Just Life Group has changed from year to year.
Is Just Life Group Limited Growing?
On average over the last three years, Just Life Group Limited has seen earnings per share (EPS) move in a favourable direction by 4.6% each year (using a line of best fit). Its revenue is up 27% over last year.
It's hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. I wouldn't say this is necessarily top notch growth, but it is certainly promising. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Just Life Group Limited Been A Good Investment?
Most shareholders would probably be pleased with Just Life Group Limited for providing a total return of 151% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Just Life Group Limited is currently paying its CEO below what is normal for companies of its size.
Tony Falkenstein receives relatively low remuneration compared to similar sized companies. And the returns to shareholders were great, over the last few years. Although we could see higher growth, we'd argue the remuneration is modest, based on these observations. Shifting gears from CEO pay for a second, we've picked out 5 warning signs for Just Life Group that investors should be aware of in a dynamic business environment.
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.
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