Shareholders may be wondering what CEO Bryan Carr plans to do to improve the less than great performance at RooLife Group Ltd (ASX:RLG) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 29 November 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
Comparing RooLife Group Ltd's CEO Compensation With the industry
At the time of writing, our data shows that RooLife Group Ltd has a market capitalization of AU$14m, and reported total annual CEO compensation of AU$436k for the year to June 2021. We note that's an increase of 8.5% above last year. Notably, the salary which is AU$273.8k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below AU$276m, we found that the median total CEO compensation was AU$693k. That is to say, Bryan Carr is paid under the industry median. Furthermore, Bryan Carr directly owns AU$268k worth of shares in the company.
On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Although there is a difference in how total compensation is set, RooLife Group more or less reflects the market in terms of setting the salary. 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.
RooLife Group Ltd's Growth
Over the past three years, RooLife Group Ltd has seen its earnings per share (EPS) grow by 53% per year. In the last year, its revenue is up 208%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has RooLife Group Ltd Been A Good Investment?
The return of -39% over three years would not have pleased RooLife Group Ltd shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for RooLife Group that investors should be aware of in a dynamic business environment.
Important note: RooLife Group 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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