Yahoo Finance Here's What We Think About Pental Limited's (ASX:PTL) CEO Pay
In 2014, Charlie McLeish was appointed CEO of Pental Limited (ASX:PTL). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Pental
How Does Charlie McLeish's Compensation Compare With Similar Sized Companies?
According to our data, Pental Limited has a market capitalization of AU$54m, and paid its CEO total annual compensation worth AU$436k over the year to June 2019. It is worth noting that the CEO compensation consists almost entirely of the salary, worth AU$422k. We took a group of companies with market capitalizations below AU$308m, and calculated the median CEO total compensation to be AU$388k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Pental stands. On a sector level, around 47% of total compensation represents salary and 53% is other remuneration. Pental is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits.
So Charlie McLeish receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. The graphic below shows how CEO compensation at Pental has changed from year to year.
Is Pental Limited Growing?
Over the last three years Pental Limited has shrunk its earnings per share by an average of 40% per year (measured with a line of best fit). It achieved revenue growth of 25% over the last year.
The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Pental Limited Been A Good Investment?
Since shareholders would have lost about 32% over three years, some Pental Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Charlie McLeish is paid around what is normal for the leaders of comparable size companies.
The per share growth could be better, in our view. And it's hard to argue that the returns over the last three years have delighted. So it would take a bold person to suggest the pay is too modest. Looking into other areas, we've picked out 3 warning signs for Pental that investors should think about before committing capital to this stock.
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.
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.
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. Thank you for reading.
