Shareholders of PaySauce Limited (NZSE:PYS) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 22 September 2022. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
How Does Total Compensation For Asantha Wijeyeratne Compare With Other Companies In The Industry?
At the time of writing, our data shows that PaySauce Limited has a market capitalization of NZ$41m, and reported total annual CEO compensation of NZ$213k for the year to March 2022. Notably, that's an increase of 19% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth NZ$213k.
On comparing similar-sized companies in the industry with market capitalizations below NZ$335m, we found that the median total CEO compensation was NZ$277k. So it looks like PaySauce compensates Asantha Wijeyeratne in line with the median for the industry. Furthermore, Asantha Wijeyeratne directly owns NZ$8.2m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. At the company level, PaySauce pays Asantha Wijeyeratne solely through a salary, preferring to go down a conventional route. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at PaySauce Limited's Growth Numbers
Over the past three years, PaySauce Limited has seen its earnings per share (EPS) grow by 47% per year. It achieved revenue growth of 60% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 PaySauce Limited Been A Good Investment?
Few PaySauce Limited shareholders would feel satisfied with the return of -37% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
PaySauce rewards its CEO solely through a salary, ignoring non-salary benefits completely. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
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 3 warning signs for PaySauce that you should be aware of before investing.
Switching gears from PaySauce, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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