What We Learned About TALi Digital's (ASX:TD1) CEO Pay
Glenn Smith became the CEO of TALi Digital Limited (ASX:TD1) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for TALi Digital.
View our latest analysis for TALi Digital
Comparing TALi Digital Limited's CEO Compensation With the industry
Our data indicates that TALi Digital Limited has a market capitalization of AU$34m, and total annual CEO compensation was reported as AU$338k for the year to June 2020. We note that's a decrease of 32% compared to last year. In particular, the salary of AU$250.0k, 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$262m, the reported median total CEO compensation was AU$455k. From this we gather that Glenn Smith is paid around the median for CEOs in the industry.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$250k | AU$250k | 74% |
Other | AU$88k | AU$248k | 26% |
Total Compensation | AU$338k | AU$498k | 100% |
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. There isn't a significant difference between TALi Digital and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at TALi Digital Limited's Growth Numbers
Over the past three years, TALi Digital Limited has seen its earnings per share (EPS) grow by 3.4% per year. In the last year, its revenue is down 32%.
We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has TALi Digital Limited Been A Good Investment?
TALi Digital Limited has not done too badly by shareholders, with a total return of 2.3%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As we touched on above, TALi Digital Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS and shareholder returns have been stable over the last three years, but have not grown substantially. Considering the steady performance, it's tough to call out CEO compensation as too high, but shareholders might want to see more robust growth metrics before agreeing to a future raise.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for TALi Digital (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
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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