Why We Think Shareholders May Be Considering Bumping Up Lycopodium Limited's (ASX:LYL) CEO Compensation
Key Insights
Lycopodium will host its Annual General Meeting on 14th of November
Salary of AU$714.5k is part of CEO Pietro De Leo's total remuneration
The total compensation is 32% less than the average for the industry
Lycopodium's total shareholder return over the past three years was 192% while its EPS grew by 58% over the past three years
The impressive results at Lycopodium Limited (ASX:LYL) recently will be great news for shareholders. At the upcoming AGM on 14th of November, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.
View our latest analysis for Lycopodium
How Does Total Compensation For Pietro De Leo Compare With Other Companies In The Industry?
At the time of writing, our data shows that Lycopodium Limited has a market capitalization of AU$378m, and reported total annual CEO compensation of AU$884k for the year to June 2023. We note that's an increase of 15% above last year. Notably, the salary which is AU$714.5k, represents most of the total compensation being paid.
For comparison, other companies in the Australian Construction industry with market capitalizations ranging between AU$156m and AU$623m had a median total CEO compensation of AU$1.3m. This suggests that Pietro De Leo is paid below the industry median. Moreover, Pietro De Leo also holds AU$9.2m worth of Lycopodium stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$715k | AU$613k | 81% |
Other | AU$170k | AU$157k | 19% |
Total Compensation | AU$884k | AU$770k | 100% |
Talking in terms of the industry, salary represented approximately 63% of total compensation out of all the companies we analyzed, while other remuneration made up 37% of the pie. Lycopodium pays out 81% of remuneration in the form of a salary, significantly higher than the industry average. 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 Lycopodium Limited's Growth Numbers
Lycopodium Limited's earnings per share (EPS) grew 58% per year over the last three years. It achieved revenue growth of 42% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Lycopodium Limited Been A Good Investment?
We think that the total shareholder return of 192%, over three years, would leave most Lycopodium 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.
To Conclude...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Lycopodium that investors should think about before committing capital to this stock.
Switching gears from Lycopodium, 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.
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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.
