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A Quick Analysis On Clover's (ASX:CLV) CEO Salary

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·3 min read
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This article will reflect on the compensation paid to Peter Davey who has served as CEO of Clover Corporation Limited (ASX:CLV) since 2014. 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 Clover

Comparing Clover Corporation Limited's CEO Compensation With the industry

At the time of writing, our data shows that Clover Corporation Limited has a market capitalization of AU$264m, and reported total annual CEO compensation of AU$952k for the year to July 2020. Notably, that's a decrease of 43% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$441k.

On examining similar-sized companies in the industry with market capitalizations between AU$131m and AU$525m, we discovered that the median CEO total compensation of that group was AU$482k. Accordingly, our analysis reveals that Clover Corporation Limited pays Peter Davey north of the industry median. Furthermore, Peter Davey directly owns AU$709k worth of shares in the company.

Component

2020

2019

Proportion (2020)

Salary

AU$441k

AU$417k

46%

Other

AU$510k

AU$1.3m

54%

Total Compensation

AU$952k

AU$1.7m

100%

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. In Clover's case, non-salary compensation represents a greater slice of total remuneration, 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.

ceo-compensation
ceo-compensation

Clover Corporation Limited's Growth

Over the past three years, Clover Corporation Limited has seen its earnings per share (EPS) grow by 50% per year. Its revenue is up 15% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Clover Corporation Limited Been A Good Investment?

We think that the total shareholder return of 120%, over three years, would leave most Clover Corporation Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we noted earlier, Clover pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. Given the strong history of shareholder returns, the shareholders are probably very happy with Peter's performance.

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 2 warning signs for Clover that you should be aware of before investing.

Switching gears from Clover, 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.

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.