Peter Cook has been the CEO of Novatti Group Limited (ASX:NOV) since 2002. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Peter Cook's Compensation Compare With Similar Sized Companies?
According to our data, Novatti Group Limited has a market capitalization of AU$33m, and paid its CEO total annual compensation worth AU$325k over the year to June 2018. We think total compensation is more important but we note that the CEO salary is lower, at AU$190k. We examined a group of similar sized companies, with market capitalizations of below AU$299m. The median CEO total compensation in that group is AU$375k.
That means Peter Cook receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Novatti Group has changed from year to year.
Is Novatti Group Limited Growing?
Novatti Group Limited has increased its earnings per share (EPS) by an average of 51% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 40%.
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. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Novatti Group Limited Been A Good Investment?
Novatti Group Limited has served shareholders reasonably well, with a total return of 11% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
Remuneration for Peter Cook is close enough to the median pay for a CEO of a similar sized company .
The company is growing EPS but shareholder returns have been sound but not amazing. So upon reflection one could argue that the CEO pay is quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Novatti Group shares (free trial).
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.
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