It Looks Like The CEO Of Technology One Limited (ASX:TNE) May Be Underpaid Compared To Peers
Key Insights
Technology One will host its Annual General Meeting on 21st of February
Salary of AU$521.3k is part of CEO Ed Chung's total remuneration
The total compensation is 52% less than the average for the industry
Technology One's total shareholder return over the past three years was 99% while its EPS grew by 17% over the past three years
Shareholders will be pleased by the impressive results for Technology One Limited (ASX:TNE) recently and CEO Ed Chung has played a key role. At the upcoming AGM on 21st of February, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.
Check out our latest analysis for Technology One
How Does Total Compensation For Ed Chung Compare With Other Companies In The Industry?
At the time of writing, our data shows that Technology One Limited has a market capitalization of AU$5.3b, and reported total annual CEO compensation of AU$2.5m for the year to September 2023. We note that's an increase of 10% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$521k.
On comparing similar companies from the Australian Software industry with market caps ranging from AU$3.1b to AU$9.8b, we found that the median CEO total compensation was AU$5.3m. In other words, Technology One pays its CEO lower than the industry median. Moreover, Ed Chung also holds AU$11m worth of Technology One stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$521k | AU$513k | 21% |
Other | AU$2.0m | AU$1.8m | 79% |
Total Compensation | AU$2.5m | AU$2.3m | 100% |
Talking in terms of the industry, salary represented approximately 58% of total compensation out of all the companies we analyzed, while other remuneration made up 42% of the pie. Technology One sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Technology One Limited's Growth
Over the past three years, Technology One Limited has seen its earnings per share (EPS) grow by 17% per year. In the last year, its revenue is up 17%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and 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 Technology One Limited Been A Good Investment?
We think that the total shareholder return of 99%, over three years, would leave most Technology One Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Technology One that investors should be aware of in a dynamic business environment.
Switching gears from Technology One, 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
