A Look At FBR's (ASX:FBR) CEO Remuneration
This article will reflect on the compensation paid to Mike Pivac who has served as CEO of FBR Limited (ASX:FBR) since 2015. This analysis will also assess whether FBR pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for FBR
How Does Total Compensation For Mike Pivac Compare With Other Companies In The Industry?
According to our data, FBR Limited has a market capitalization of AU$109m, and paid its CEO total annual compensation worth AU$510k over the year to June 2020. We note that's a decrease of 17% compared to last year. In particular, the salary of AU$375.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below AU$259m, reported a median total CEO compensation of AU$350k. Hence, we can conclude that Mike Pivac is remunerated higher than the industry median. What's more, Mike Pivac holds AU$6.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$375k | AU$375k | 74% |
Other | AU$135k | AU$242k | 26% |
Total Compensation | AU$510k | AU$617k | 100% |
On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. In FBR's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader 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.
A Look at FBR Limited's Growth Numbers
FBR Limited's earnings per share (EPS) grew 5.9% per year over the last three years. In the last year, its revenue is up 70%.
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! Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has FBR Limited Been A Good Investment?
Since shareholders would have lost about 67% over three years, some FBR Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, FBR pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for FBR, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look good when you see that Mike is earning more than the industry median. Taking all this into account, it could be hard to get shareholder support for giving Mike a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for FBR (2 are significant!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.