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What We Learned About Euroz's (ASX:EZL) CEO Compensation

Simply Wall St
·3 min read

Andrew McKenzie is the CEO of Euroz Limited (ASX:EZL), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Euroz pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Euroz

How Does Total Compensation For Andrew McKenzie Compare With Other Companies In The Industry?

Our data indicates that Euroz Limited has a market capitalization of AU$230m, and total annual CEO compensation was reported as AU$766k for the year to June 2020. Notably, that's an increase of 11% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$246k.

On examining similar-sized companies in the industry with market capitalizations between AU$142m and AU$568m, we discovered that the median CEO total compensation of that group was AU$830k. From this we gather that Andrew McKenzie is paid around the median for CEOs in the industry. Furthermore, Andrew McKenzie directly owns AU$16m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

AU$246k

AU$243k

32%

Other

AU$520k

AU$448k

68%

Total Compensation

AU$766k

AU$692k

100%

On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. In Euroz's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Euroz Limited's Growth

Over the last three years, Euroz Limited has shrunk its earnings per share by 51% per year. In the last year, its revenue changed by just 0.7%.

The decline in EPS is a bit concerning. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Euroz Limited Been A Good Investment?

With a total shareholder return of 25% over three years, Euroz Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we noted earlier, Euroz pays its CEO in line with similar-sized companies belonging to the same industry. Euroz has had a poor showing when it comes to EPS growth, and it's tough to say that shareholder returns have done much to excite us. These figures do not go well against CEO compensation, which is more or less equal to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Euroz that investors should be aware of in a dynamic business environment.

Switching gears from Euroz, 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.