Tony Klim became the CEO of Bravura Solutions Limited (ASX:BVS) in 2011, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Bravura Solutions.
How Does Total Compensation For Tony Klim Compare With Other Companies In The Industry?
According to our data, Bravura Solutions Limited has a market capitalization of AU$734m, and paid its CEO total annual compensation worth AU$1.8m over the year to June 2020. We note that's an increase of 18% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$822k.
In comparison with other companies in the industry with market capitalizations ranging from AU$257m to AU$1.0b, the reported median CEO total compensation was AU$1.1m. Accordingly, our analysis reveals that Bravura Solutions Limited pays Tony Klim north of the industry median. Furthermore, Tony Klim directly owns AU$3.6m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. Bravura Solutions sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Bravura Solutions Limited's Growth
Bravura Solutions Limited has seen its earnings per share (EPS) increase by 28% a year over the past three years. In the last year, its revenue is up 6.6%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Bravura Solutions Limited Been A Good Investment?
We think that the total shareholder return of 71%, over three years, would leave most Bravura Solutions Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we noted earlier, Bravura Solutions pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But EPS growth and shareholder returns have been top-notch for the past three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Tony's performance creates value for the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Bravura Solutions (of which 1 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Bravura Solutions, 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.
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