Yahoo Finance Shareholders May Not Be So Generous With QANTM Intellectual Property Limited's (ASX:QIP) CEO Compensation And Here's Why
Key Insights
QANTM Intellectual Property's Annual General Meeting to take place on 23rd of November
Salary of AU$674.7k is part of CEO Craig Dower's total remuneration
Total compensation is 60% above industry average
QANTM Intellectual Property's total shareholder return over the past three years was 4.6% while its EPS was down 7.9% over the past three years
Share price growth at QANTM Intellectual Property Limited (ASX:QIP) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. Some of these issues will occupy shareholders' minds as the AGM rolls around on 23rd of November. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.
See our latest analysis for QANTM Intellectual Property
Comparing QANTM Intellectual Property Limited's CEO Compensation With The Industry
At the time of writing, our data shows that QANTM Intellectual Property Limited has a market capitalization of AU$130m, and reported total annual CEO compensation of AU$956k for the year to June 2023. That's a modest increase of 6.9% on the prior year. In particular, the salary of AU$674.7k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the Australian Professional Services industry with market capitalizations below AU$307m, we found that the median total CEO compensation was AU$598k. Hence, we can conclude that Craig Dower is remunerated higher than the industry median. Furthermore, Craig Dower directly owns AU$274k worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$675k | AU$630k | 71% |
Other | AU$282k | AU$264k | 29% |
Total Compensation | AU$956k | AU$895k | 100% |
Talking in terms of the industry, salary represented approximately 65% of total compensation out of all the companies we analyzed, while other remuneration made up 35% of the pie. Although there is a difference in how total compensation is set, QANTM Intellectual Property more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at QANTM Intellectual Property Limited's Growth Numbers
Over the last three years, QANTM Intellectual Property Limited has shrunk its earnings per share by 7.9% per year. Its revenue is up 7.6% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has QANTM Intellectual Property Limited Been A Good Investment?
QANTM Intellectual Property Limited has generated a total shareholder return of 4.6% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.
In Summary...
The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for QANTM Intellectual Property that investors should think about before committing capital to this stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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.
