Shareholders May Be More Conservative With WestStar Industrial Limited's (ASX:WSI) CEO Compensation For Now
Shareholders of WestStar Industrial Limited (ASX:WSI) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 29 November 2022. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
Check out our latest analysis for WestStar Industrial
Comparing WestStar Industrial Limited's CEO Compensation With The Industry
Our data indicates that WestStar Industrial Limited has a market capitalization of AU$21m, and total annual CEO compensation was reported as AU$498k for the year to June 2022. Notably, that's a decrease of 16% over the year before. In particular, the salary of AU$413.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$303m, the reported median total CEO compensation was AU$366k. Hence, we can conclude that Robert Spadanuda is remunerated higher than the industry median. Furthermore, Robert Spadanuda directly owns AU$652k worth of shares in the company.
Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. WestStar Industrial pays out 83% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
WestStar Industrial Limited's Growth
Over the past three years, WestStar Industrial Limited has seen its earnings per share (EPS) grow by 27% per year. Its revenue is up 153% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has WestStar Industrial Limited Been A Good Investment?
Given the total shareholder loss of 21% over three years, many shareholders in WestStar Industrial Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for WestStar Industrial that you should be aware of before investing.
Switching gears from WestStar Industrial, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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