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Wayne Arthur is the CEO of Skyfii Limited (ASX:SKF), 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 Skyfii pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Skyfii Limited's CEO Compensation With the industry
According to our data, Skyfii Limited has a market capitalization of AU$80m, and paid its CEO total annual compensation worth AU$731k over the year to June 2020. Notably, that's an increase of 45% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$338k.
On comparing similar-sized companies in the industry with market capitalizations below AU$275m, we found that the median total CEO compensation was AU$336k. This suggests that Wayne Arthur is paid more than the median for the industry. What's more, Wayne Arthur holds AU$2.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. In Skyfii's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Skyfii Limited's Growth Numbers
Over the past three years, Skyfii Limited has seen its earnings per share (EPS) grow by 14% per year. Its revenue is up 44% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Skyfii Limited Been A Good Investment?
Most shareholders would probably be pleased with Skyfii Limited for providing a total return of 216% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Wayne is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But EPS growth and shareholder returns have been top-notch for the past three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Wayne deserves a raise!
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Skyfii that investors should think about before committing capital to this stock.
Important note: Skyfii is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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