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The performance at CV Check Ltd (ASX:CV1) has been quite strong recently and CEO Rod Sherwood has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 31 March 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
How Does Total Compensation For Rod Sherwood Compare With Other Companies In The Industry?
Our data indicates that CV Check Ltd has a market capitalization of AU$53m, and total annual CEO compensation was reported as AU$378k for the year to June 2020. That's just a smallish increase of 4.9% on last year. In particular, the salary of AU$303.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$261m, we found that the median total CEO compensation was AU$410k. So it looks like CV Check compensates Rod Sherwood in line with the median for the industry. What's more, Rod Sherwood holds AU$2.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 46% of total compensation out of all the companies we analyzed, while other remuneration made up 54% of the pie. It's interesting to note that CV Check pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
CV Check Ltd's Growth
Over the past three years, CV Check Ltd has seen its earnings per share (EPS) grow by 53% per year. Its revenue is down 1.3% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 CV Check Ltd Been A Good Investment?
We think that the total shareholder return of 96%, over three years, would leave most CV Check Ltd shareholders smiling. 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.
Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for CV Check that investors should think about before committing capital to this stock.
Switching gears from CV Check, 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.
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