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How Much Is Spacetalk Limited (ASX:SPA) Paying Its CEO?

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Simply Wall St
·4-min read
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Mark Fortunatow is the CEO of Spacetalk Limited (ASX:SPA), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Spacetalk pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Spacetalk

How Does Total Compensation For Mark Fortunatow Compare With Other Companies In The Industry?

Our data indicates that Spacetalk Limited has a market capitalization of AU$26m, and total annual CEO compensation was reported as AU$1.6m for the year to June 2020. We note that's an increase of 79% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$398k.

In comparison with other companies in the industry with market capitalizations under AU$258m, the reported median total CEO compensation was AU$325k. Hence, we can conclude that Mark Fortunatow is remunerated higher than the industry median. Moreover, Mark Fortunatow also holds AU$3.2m worth of Spacetalk stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

AU$398k

AU$450k

25%

Other

AU$1.2m

AU$450k

75%

Total Compensation

AU$1.6m

AU$900k

100%

On an industry level, roughly 73% of total compensation represents salary and 27% is other remuneration. It's interesting to note that Spacetalk allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Spacetalk Limited's Growth Numbers

Over the last three years, Spacetalk Limited has shrunk its earnings per share by 46% per year. Its revenue is up 46% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is 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 Spacetalk Limited Been A Good Investment?

Boasting a total shareholder return of 173% over three years, Spacetalk Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we touched on above, Spacetalk Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But Spacetalk is growing its revenue, and total shareholder returns have also been pleasing for the last three years. The only sore spot is EPS growth, which is negative over the same period. All things considered, although EPS growth would've been nice, the positive investor returns and revenue growth lead us to believe Mark is appropriately paid.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 2 which don't sit too well with us) in Spacetalk we think you should know about.

Switching gears from Spacetalk, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.