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Is Senetas Corporation Limited's (ASX:SEN) CEO Being Overpaid?

Simply Wall St

Andrew Wilson became the CEO of Senetas Corporation Limited (ASX:SEN) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Senetas

How Does Andrew Wilson's Compensation Compare With Similar Sized Companies?

Our data indicates that Senetas Corporation Limited is worth AU$77m, and total annual CEO compensation is AU$532k. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$400k. We looked at a group of companies with market capitalizations under AU$292m, and the median CEO total compensation was AU$362k.

As you can see, Andrew Wilson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Senetas Corporation Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Senetas has changed from year to year.

ASX:SEN CEO Compensation, September 10th 2019

Is Senetas Corporation Limited Growing?

On average over the last three years, Senetas Corporation Limited has shrunk earnings per share by 77% each year (measured with a line of best fit). It achieved revenue growth of 12% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Senetas Corporation Limited Been A Good Investment?

Since shareholders would have lost about 28% over three years, some Senetas Corporation Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at Senetas Corporation Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Senetas shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.