Ralph Schmitt became the CEO of Sensera Limited (ASX:SE1) in 2017, 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 Sensera.
Comparing Sensera Limited's CEO Compensation With the industry
At the time of writing, our data shows that Sensera Limited has a market capitalization of AU$36m, and reported total annual CEO compensation of US$304k for the year to June 2020. Notably, that's a decrease of 47% over the year before. In particular, the salary of US$242.2k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$257m, we found that the median total CEO compensation was US$266k. This suggests that Sensera remunerates its CEO largely in line with the industry average. Furthermore, Ralph Schmitt directly owns AU$274k worth of shares in the company.
Talking in terms of the industry, salary represented approximately 90% of total compensation out of all the companies we analyzed, while other remuneration made up 9.8% of the pie. It's interesting to note that Sensera allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Sensera Limited's Growth Numbers
Over the past three years, Sensera Limited has seen its earnings per share (EPS) grow by 20% per year. It achieved revenue growth of 16% 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. 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 Sensera Limited Been A Good Investment?
Since shareholders would have lost about 69% over three years, some Sensera Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Sensera pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Ralph is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for Sensera (1 is concerning!) that you should be aware of before investing here.
Switching gears from Sensera, 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 (at) simplywallst.com.