The CEO of Serko Limited (NZSE:SKO) is Darrin Grafton. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Darrin Grafton's Compensation Compare With Similar Sized Companies?
According to our data, Serko Limited has a market capitalization of NZ$497m, and paid its CEO total annual compensation worth NZ$631k over the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at NZ$350k. We looked at a group of companies with market capitalizations from NZ$302m to NZ$1.2b, and the median CEO total compensation was NZ$990k.
Most shareholders would consider it a positive that Darrin Grafton takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Serko has changed over time.
Is Serko Limited Growing?
Over the last three years Serko Limited has grown its earnings per share (EPS) by an average of 104% per year (using a line of best fit). It achieved revenue growth of 30% over the last year.
This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. It could be important to check this free visual depiction of what analysts expect for the future.
Has Serko Limited Been A Good Investment?
I think that the total shareholder return of 1536%, over three years, would leave most Serko Limited 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.
It looks like Serko Limited pays its CEO less than similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Darrin Grafton deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Serko shares (free trial).
If you want to buy a stock that is better than Serko, this free list of high return, low debt companies is a great place to look.
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