Yahoo Finance Shareholders Will Most Likely Find Clover Corporation Limited's (ASX:CLV) CEO Compensation Acceptable
Despite Clover Corporation Limited's (ASX:CLV) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 18 November 2021. They will be able to influence managerial decisions through the exercise of their voting power on resolutions, such as CEO remuneration and other matters, which may influence future company prospects. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
View our latest analysis for Clover
How Does Total Compensation For Peter Davey Compare With Other Companies In The Industry?
According to our data, Clover Corporation Limited has a market capitalization of AU$273m, and paid its CEO total annual compensation worth AU$602k over the year to June 2021. We note that's a decrease of 37% compared to last year. In particular, the salary of AU$453.6k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the same industry with market capitalizations ranging between AU$136m and AU$543m had a median total CEO compensation of AU$535k. This suggests that Clover remunerates its CEO largely in line with the industry average. What's more, Peter Davey holds AU$750k worth of shares in the company in their own name.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$454k | AU$441k | 75% |
Other | AU$149k | AU$510k | 25% |
Total Compensation | AU$602k | AU$952k | 100% |
Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. Clover is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Clover Corporation Limited's Growth
Over the last three years, Clover Corporation Limited has shrunk its earnings per share by 7.7% per year. Its revenue is down 31% over the previous year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Clover Corporation Limited Been A Good Investment?
With a total shareholder return of 21% over three years, Clover Corporation Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
Shareholder returns, while positive, should be looked at along with earnings, which have not grown at all recently. This makes us think the share price momentum may slow in the future. 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.
CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Clover (free visualization of insider trades).
Switching gears from Clover, 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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