Yahoo Finance Does DigitalX Limited's (ASX:DCC) CEO Pay Matter?
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In 2016 Leigh Travers was appointed CEO of DigitalX Limited (ASX:DCC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for DigitalX
How Does Leigh Travers's Compensation Compare With Similar Sized Companies?
According to our data, DigitalX Limited has a market capitalization of AU$36m, and pays its CEO total annual compensation worth US$918k. (This figure is for the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$134k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$248k.
It would therefore appear that DigitalX Limited pays Leigh Travers more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at DigitalX has changed over time.
Is DigitalX Limited Growing?
On average over the last three years, DigitalX Limited has grown earnings per share (EPS) by 39% each year (using a line of best fit). It achieved revenue growth of 53% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has DigitalX Limited Been A Good Investment?
Given the total loss of 52% over three years, many shareholders in DigitalX Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
We compared the total CEO remuneration paid by DigitalX Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shareholders may want to check for free if DigitalX insiders are buying or selling shares.
Important note: DigitalX may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
