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Rob Newman has been the CEO of Nearmap Ltd (ASX:NEA) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Nearmap.
How Does Total Compensation For Rob Newman Compare With Other Companies In The Industry?
According to our data, Nearmap Ltd has a market capitalization of AU$1.1b, and paid its CEO total annual compensation worth AU$1.1m over the year to June 2020. Notably, that's a decrease of 17% over the year before. In particular, the salary of AU$584.6k, makes up a huge portion of the total compensation being paid to the CEO.
On examining similar-sized companies in the industry with market capitalizations between AU$516m and AU$2.1b, we discovered that the median CEO total compensation of that group was AU$1.2m. So it looks like Nearmap compensates Rob Newman in line with the median for the industry. Furthermore, Rob Newman directly owns AU$25m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. There isn't a significant difference between Nearmap and the broader market, in terms of salary allocation in the overall compensation package. 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 Nearmap Ltd's Growth Numbers
Over the last three years, Nearmap Ltd has shrunk its earnings per share by 46% per year. It achieved revenue growth of 19% over the last year.
The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Nearmap Ltd Been A Good Investment?
Most shareholders would probably be pleased with Nearmap Ltd for providing a total return of 213% over three years. 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.
As we touched on above, Nearmap Ltd is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company has logged solid shareholder returns for the past three years. Revenues have also showed some positive momentum, recently. On a worrying note, its important to acknowledge that EPS growth has been negative recently. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Nearmap that investors should think about before committing capital to this stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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