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Does Clean TeQ Holdings' (ASX:CLQ) CEO Salary Compare Well With The Performance Of The Company?

Simply Wall St
·3-min read

Sam Riggall has been the CEO of Clean TeQ Holdings Limited (ASX:CLQ) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Clean TeQ Holdings

Comparing Clean TeQ Holdings Limited's CEO Compensation With the industry

Our data indicates that Clean TeQ Holdings Limited has a market capitalization of AU$215m, and total annual CEO compensation was reported as AU$754k for the year to June 2020. We note that's an increase of 14% above last year. We note that the salary portion, which stands at AU$435.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from AU$133m to AU$532m, the reported median CEO total compensation was AU$748k. From this we gather that Sam Riggall is paid around the median for CEOs in the industry. Furthermore, Sam Riggall directly owns AU$7.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

AU$435k

AU$435k

58%

Other

AU$319k

AU$227k

42%

Total Compensation

AU$754k

AU$662k

100%

On an industry level, around 65% of total compensation represents salary and 35% is other remuneration. In Clean TeQ Holdings' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at Clean TeQ Holdings Limited's Growth Numbers

Over the last three years, Clean TeQ Holdings Limited has shrunk its earnings per share by 87% per year. It saw its revenue drop 75% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Clean TeQ Holdings Limited Been A Good Investment?

With a three year total loss of 83% for the shareholders, Clean TeQ Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we touched on above, Clean TeQ Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

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. In our study, we found 5 warning signs for Clean TeQ Holdings you should be aware of, and 3 of them are concerning.

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.

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@simplywallst.com.