Yahoo Finance Does CV Check's (ASX:CV1) CEO Salary Compare Well With The Performance Of The Company?
Rod Sherwood became the CEO of CV Check Ltd (ASX:CV1) in 2016, 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 CV Check.
Check out our latest analysis for CV Check
Comparing CV Check Ltd's CEO Compensation With the industry
According to our data, CV Check Ltd has a market capitalization of AU$51m, and paid its CEO total annual compensation worth AU$378k over the year to June 2020. That's a fairly small increase of 4.9% over the previous year. Notably, the salary which is AU$303.0k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below AU$272m, reported a median total CEO compensation of AU$424k. From this we gather that Rod Sherwood is paid around the median for CEOs in the industry. Furthermore, Rod Sherwood directly owns AU$2.4m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$303k | AU$284k | 80% |
Other | AU$75k | AU$77k | 20% |
Total Compensation | AU$378k | AU$361k | 100% |
On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. It's interesting to note that CV Check pays out a greater portion of remuneration through salary, compared to the industry. 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.
CV Check Ltd's Growth
CV Check Ltd's earnings per share (EPS) grew 49% per year over the last three years. Revenue was pretty flat on last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has CV Check Ltd Been A Good Investment?
Most shareholders would probably be pleased with CV Check Ltd for providing a total return of 118% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As previously discussed, Rod is compensated close to the median for companies of its size, and which belong to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for CV Check that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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