Shareholders Would Not Be Objecting To Stealth Global Holdings Limited's (ASX:SGI) CEO Compensation And Here's Why
Key Insights
Stealth Global Holdings' Annual General Meeting to take place on 24th of November
Total pay for CEO Mike Arnold includes AU$486.8k salary
The overall pay is comparable to the industry average
Stealth Global Holdings' EPS grew by 107% over the past three years while total shareholder return over the past three years was 182%
We have been pretty impressed with the performance at Stealth Global Holdings Limited (ASX:SGI) recently and CEO Mike Arnold deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 24th of November. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.
Check out our latest analysis for Stealth Global Holdings
Comparing Stealth Global Holdings Limited's CEO Compensation With The Industry
According to our data, Stealth Global Holdings Limited has a market capitalization of AU$24m, and paid its CEO total annual compensation worth AU$638k over the year to June 2023. That's a modest increase of 7.5% on the prior year. We note that the salary portion, which stands at AU$486.8k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the Australian Trade Distributors industry with market capitalizations under AU$308m, the reported median total CEO compensation was AU$639k. From this we gather that Mike Arnold is paid around the median for CEOs in the industry. Furthermore, Mike Arnold directly owns AU$2.6m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$487k | AU$487k | 76% |
Other | AU$151k | AU$107k | 24% |
Total Compensation | AU$638k | AU$594k | 100% |
On an industry level, around 53% of total compensation represents salary and 47% is other remuneration. Stealth Global Holdings is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Stealth Global Holdings Limited's Growth
Stealth Global Holdings Limited has seen its earnings per share (EPS) increase by 107% a year over the past three years. In the last year, its revenue is up 11%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Stealth Global Holdings Limited Been A Good Investment?
We think that the total shareholder return of 182%, over three years, would leave most Stealth Global Holdings Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Stealth Global Holdings you should be aware of, and 1 of them is concerning.
Important note: Stealth Global Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
