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How Much Did Capral's (ASX:CAA) CEO Pocket Last Year?

Simply Wall St
·3 mins read

Tony Dragicevich became the CEO of Capral Limited (ASX:CAA) in 2013, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Capral

How Does Total Compensation For Tony Dragicevich Compare With Other Companies In The Industry?

At the time of writing, our data shows that Capral Limited has a market capitalization of AU$72m, and reported total annual CEO compensation of AU$828k for the year to December 2019. That's a slight decrease of 3.5% on the prior year. Notably, the salary which is AU$687.8k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$280m, the reported median total CEO compensation was AU$310k. Accordingly, our analysis reveals that Capral Limited pays Tony Dragicevich north of the industry median. Moreover, Tony Dragicevich also holds AU$1.5m worth of Capral stock directly under their own name.

Component

2019

2018

Proportion (2019)

Salary

AU$688k

AU$678k

83%

Other

AU$140k

AU$179k

17%

Total Compensation

AU$828k

AU$858k

100%

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. According to our research, Capral has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

A Look at Capral Limited's Growth Numbers

Over the last three years, Capral Limited has shrunk its earnings per share by 10.0% per year. It saw its revenue drop 3.6% over the last year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Capral Limited Been A Good Investment?

Capral Limited has served shareholders reasonably well, with a total return of 31% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As we touched on above, Capral Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look great when you realize that the company has been suffering from negative EPS growth for the last three years. And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the amount Tony makes is justifiable.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Capral you should be aware of, and 1 of them is significant.

Important note: Capral 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.