Mark Benson became the CEO of Saunders International Limited (ASX:SND) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Saunders International.
Comparing Saunders International Limited's CEO Compensation With the industry
At the time of writing, our data shows that Saunders International Limited has a market capitalization of AU$59m, and reported total annual CEO compensation of AU$827k for the year to June 2020. Notably, that's an increase of 24% over the year before. Notably, the salary which is AU$468.1k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below AU$280m, reported a median total CEO compensation of AU$689k. This suggests that Saunders International remunerates its CEO largely in line with the industry average. Moreover, Mark Benson also holds AU$316k worth of Saunders International stock directly under their own name.
On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. In Saunders International's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Saunders International Limited's Growth
Saunders International Limited has reduced its earnings per share by 11% a year over the last three years. In the last year, its revenue is up 33%.
The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Saunders International Limited Been A Good Investment?
Saunders International Limited has not done too badly by shareholders, with a total return of 8.5%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we noted earlier, Saunders International pays its CEO in line with similar-sized companies belonging to the same industry. But revenues have been growing at a healthy pace, more recently. Shareholder returns, in comparison, have not been as impressive during the same period. An additional worry is EPS , which has posted negative growth in the previous three years. But we don't think the CEO compensation is a problem, although shareholders might want to see more growth before agreeing that Mark should get a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Saunders International (1 is concerning!) 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.
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