Glen Robinson has been the CEO of Beacon Lighting Group Limited (ASX:BLX) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Beacon Lighting Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Beacon Lighting Group Limited's CEO Compensation With the industry
At the time of writing, our data shows that Beacon Lighting Group Limited has a market capitalization of AU$324m, and reported total annual CEO compensation of AU$519k for the year to June 2020. That's a notable increase of 9.6% on last year. We note that the salary portion, which stands at AU$346.4k constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between AU$138m and AU$550m, we discovered that the median CEO total compensation of that group was AU$786k. In other words, Beacon Lighting Group pays its CEO lower than the industry median. What's more, Glen Robinson holds AU$254k worth of shares in the company in their own name.
On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. Although there is a difference in how total compensation is set, Beacon Lighting Group more or less reflects the market in terms of setting the salary. 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 Beacon Lighting Group Limited's Growth Numbers
Beacon Lighting Group Limited's earnings per share (EPS) grew 9.3% per year over the last three years. Its revenue is up 2.5% over the last year.
We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 Beacon Lighting Group Limited Been A Good Investment?
Beacon Lighting Group Limited has not done too badly by shareholders, with a total return of 6.1%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
As we touched on above, Beacon Lighting Group Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But, shareholder returns and EPS growth have been unimpressive recently. Consequently, despite CEO compensation being reasonable by all accounts, shareholders will likely want to see more growth before they agree to a potential bump.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Beacon Lighting Group that investors should look into moving forward.
Important note: Beacon Lighting Group 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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