Alan Sparks became the CEO of Cellnet Group Limited (ASX:CLT) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Alan Sparks's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Cellnet Group Limited has a market cap of AU$12m, and reported total annual CEO compensation of AU$344k for the year to June 2019. That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at AU$292k. We examined a group of similar sized companies, with market capitalizations of below AU$292m. The median CEO total compensation in that group is AU$378k.
So Alan Sparks receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Cellnet Group has changed from year to year.
Is Cellnet Group Limited Growing?
Over the last three years Cellnet Group Limited has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). In the last year, its revenue is up 27%.
This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Cellnet Group Limited Been A Good Investment?
Since shareholders would have lost about 24% over three years, some Cellnet Group Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Alan Sparks is paid around the same as most CEOs of similar size companies.
We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Cellnet Group (free visualization of insider trades).
If you want to buy a stock that is better than Cellnet Group, this free list of high return, low debt companies is a great place to look.
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