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It Looks Like Shareholders Would Probably Approve Sequoia Financial Group Limited's (ASX:SEQ) CEO Compensation Package

We have been pretty impressed with the performance at Sequoia Financial Group Limited (ASX:SEQ) recently and CEO Garry Crole deserves a mention for their role in it. Coming up to the next AGM on 23 November 2022, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for Sequoia Financial Group

Comparing Sequoia Financial Group Limited's CEO Compensation With The Industry

Our data indicates that Sequoia Financial Group Limited has a market capitalization of AU$77m, and total annual CEO compensation was reported as AU$511k for the year to June 2022. We note that's a small decrease of 4.2% on last year. In particular, the salary of AU$462.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under AU$295m, the reported median total CEO compensation was AU$432k. So it looks like Sequoia Financial Group compensates Garry Crole in line with the median for the industry. Moreover, Garry Crole also holds AU$6.8m worth of Sequoia Financial Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2022

2021

Proportion (2022)

Salary

AU$462k

AU$378k

90%

Other

AU$49k

AU$154k

10%

Total Compensation

AU$511k

AU$533k

100%

Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. Sequoia Financial Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

Sequoia Financial Group Limited's Growth

Sequoia Financial Group Limited has seen its earnings per share (EPS) increase by 167% a year over the past three years. In the last year, its revenue is up 52%.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Sequoia Financial Group Limited Been A Good Investment?

We think that the total shareholder return of 198%, over three years, would leave most Sequoia Financial Group Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Sequoia Financial Group that investors should be aware of in a dynamic business environment.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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