It's Unlikely That Prestal Holdings Limited's (ASX:PTL) CEO Will See A Huge Pay Rise This Year
Key Insights
Prestal Holdings' Annual General Meeting to take place on 30th of November
Total pay for CEO Charles McLeish includes AU$522.5k salary
The total compensation is 48% higher than the average for the industry
Prestal Holdings' EPS declined by 8.0% over the past three years while total shareholder return over the past three years was 21%
The share price of Prestal Holdings Limited (ASX:PTL) has been growing in the past few years, however, the per-share earnings growth has been lacking, suggesting something is amiss. The upcoming AGM on 30th of November may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
View our latest analysis for Prestal Holdings
How Does Total Compensation For Charles McLeish Compare With Other Companies In The Industry?
Our data indicates that Prestal Holdings Limited has a market capitalization of AU$69m, and total annual CEO compensation was reported as AU$639k for the year to July 2023. Notably, that's a decrease of 11% over the year before. We note that the salary portion, which stands at AU$522.5k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the Australia Household Products industry with market capitalizations under AU$305m, the reported median total CEO compensation was AU$433k. Accordingly, our analysis reveals that Prestal Holdings Limited pays Charles McLeish north of the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$522k | AU$532k | 82% |
Other | AU$117k | AU$187k | 18% |
Total Compensation | AU$639k | AU$718k | 100% |
On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. It's interesting to note that Prestal Holdings pays out a greater portion of remuneration through salary, compared to the industry. 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 Prestal Holdings Limited's Growth Numbers
Over the last three years, Prestal Holdings Limited has shrunk its earnings per share by 8.0% per year. Its revenue is down 1.8% over the previous year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Prestal Holdings Limited Been A Good Investment?
Prestal Holdings Limited has served shareholders reasonably well, with a total return of 21% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Prestal Holdings that investors should look into moving forward.
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.
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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.
