Yahoo Finance Shareholders May Be More Conservative With Contango Asset Management Limited's (ASX:CGA) CEO Compensation For Now
Performance at Contango Asset Management Limited (ASX:CGA) has been reasonably good and CEO Marty Switzer has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 11 November 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.
Check out our latest analysis for Contango Asset Management
How Does Total Compensation For Marty Switzer Compare With Other Companies In The Industry?
At the time of writing, our data shows that Contango Asset Management Limited has a market capitalization of AU$46m, and reported total annual CEO compensation of AU$584k for the year to June 2021. We note that's an increase of 30% above last year. In particular, the salary of AU$384.5k, 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$269m, we found that the median total CEO compensation was AU$436k. This suggests that Marty Switzer is paid more than the median for the industry. Moreover, Marty Switzer also holds AU$785k worth of Contango Asset Management stock directly under their own name.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$385k | AU$412k | 66% |
Other | AU$200k | AU$35k | 34% |
Total Compensation | AU$584k | AU$448k | 100% |
On an industry level, around 58% of total compensation represents salary and 42% is other remuneration. It's interesting to note that Contango Asset Management pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Contango Asset Management Limited's Growth
Over the last three years, Contango Asset Management Limited has shrunk its earnings per share by 62% per year. In the last year, its revenue is up 19%.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. 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 Contango Asset Management Limited Been A Good Investment?
Most shareholders would probably be pleased with Contango Asset Management Limited for providing a total return of 74% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
The overall company performance has been commendable, however there are still areas for improvement. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Contango Asset Management that investors should be aware of in a dynamic business environment.
Switching gears from Contango Asset Management, 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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