Yahoo Finance Does Rhinomed's (ASX:RNO) CEO Salary Compare Well With Industry Peers?
Michael Johnson is the CEO of Rhinomed Limited (ASX:RNO), and in this article, we analyze the executive's compensation package 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.
View our latest analysis for Rhinomed
Comparing Rhinomed Limited's CEO Compensation With the industry
Our data indicates that Rhinomed Limited has a market capitalization of AU$29m, and total annual CEO compensation was reported as AU$1.0m for the year to June 2020. That's a notable increase of 39% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$304k.
For comparison, other companies in the industry with market capitalizations below AU$259m, reported a median total CEO compensation of AU$441k. This suggests that Michael Johnson is paid more than the median for the industry.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$304k | AU$305k | 29% |
Other | AU$733k | AU$443k | 71% |
Total Compensation | AU$1.0m | AU$748k | 100% |
Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. Rhinomed pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Rhinomed Limited's Growth
Over the past three years, Rhinomed Limited has seen its earnings per share (EPS) grow by 9.7% per year. It achieved revenue growth of 26% over the last year.
It's great to see that revenue growth is strong. With that in mind, the modestly improving EPS seems positive. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! 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 Rhinomed Limited Been A Good Investment?
With a three year total loss of 3.8% for the shareholders, Rhinomed Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, Rhinomed pays its CEO higher than the norm for similar-sized companies belonging to the same industry. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. This doesn't look good when you see that Michael is earning more than the industry median. With such poor returns, we would understand if shareholders had concerns related to the CEO's pay.
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 did our research and identified 5 warning signs (and 1 which is a bit concerning) in Rhinomed we think you should know about.
Important note: Rhinomed is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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