Yahoo Finance A Quick Analysis On Eneco Refresh's (ASX:ERG) CEO Salary
Henry Heng is the CEO of Eneco Refresh Limited (ASX:ERG), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Eneco Refresh.
See our latest analysis for Eneco Refresh
Comparing Eneco Refresh Limited's CEO Compensation With the industry
Our data indicates that Eneco Refresh Limited has a market capitalization of AU$17m, and total annual CEO compensation was reported as AU$249k for the year to June 2020. That's a notable increase of 9.4% on last year. In particular, the salary of AU$173.7k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$284m, we found that the median total CEO compensation was AU$478k. This suggests that Henry Heng is paid below the industry median. Moreover, Henry Heng also holds AU$1.3m worth of Eneco Refresh 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$174k | AU$162k | 70% |
Other | AU$75k | AU$66k | 30% |
Total Compensation | AU$249k | AU$228k | 100% |
Speaking on an industry level, nearly 54% of total compensation represents salary, while the remainder of 46% is other remuneration. According to our research, Eneco Refresh has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Eneco Refresh Limited's Growth Numbers
Over the last three years, Eneco Refresh Limited has shrunk its earnings per share by 20% per year. Its revenue is up 24% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Eneco Refresh Limited Been A Good Investment?
Given the total shareholder loss of 4.6% over three years, many shareholders in Eneco Refresh Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As previously discussed, Henry is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But shareholder returns and EPS growth over the past three years are negative, which is cause for concern. Conversely, revenues are increasing at a healthy pace, recently. Though we believe Henry is modestly compensated, shareholders might want to see positive shareholder returns before agreeing compensation should be raised.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 3 warning signs for Eneco Refresh (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.
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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