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Andrew Hansen became the CEO of Hansen Technologies Limited (ASX:HSN) in 1993, 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 Hansen Technologies.
How Does Total Compensation For Andrew Hansen Compare With Other Companies In The Industry?
At the time of writing, our data shows that Hansen Technologies Limited has a market capitalization of AU$777m, and reported total annual CEO compensation of AU$1.8m for the year to June 2020. Notably, that's an increase of 11% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$861k.
For comparison, other companies in the same industry with market capitalizations ranging between AU$272m and AU$1.1b had a median total CEO compensation of AU$1.1m. This suggests that Andrew Hansen is paid more than the median for the industry. Moreover, Andrew Hansen also holds AU$136m worth of Hansen Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. It's interesting to note that Hansen Technologies allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Hansen Technologies Limited's Growth Numbers
Hansen Technologies Limited saw earnings per share stay pretty flat over the last three years. It achieved revenue growth of 30% over the last year.
The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Hansen Technologies Limited Been A Good Investment?
Hansen Technologies Limited has generated a total shareholder return of 14% over three years, so most shareholders would be reasonably content. 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 previously discussed, Andrew is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. At the same time, revenue figures for the company are growing at a nice pace over the last year. Shareholder returns have also grown during this time, but haven't been as impressive. Importantly, EPS growth is negative, a worrying trend. While the CEO may not be underpaid, we don't think the pay is too generous either.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Hansen Technologies that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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