Yahoo Finance Shareholders Will Probably Hold Off On Increasing Yellow Brick Road Holdings Limited's (ASX:YBR) CEO Compensation For The Time Being
In the past three years, the share price of Yellow Brick Road Holdings Limited (ASX:YBR) has struggled to generate growth for its shareholders. 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 25 October 2021. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for Yellow Brick Road Holdings
Comparing Yellow Brick Road Holdings Limited's CEO Compensation With the industry
Our data indicates that Yellow Brick Road Holdings Limited has a market capitalization of AU$29m, and total annual CEO compensation was reported as AU$1.1m for the year to June 2021. This means that the compensation hasn't changed much from last year. It is worth noting that the CEO compensation consists entirely of the salary, worth AU$1.1m.
For comparison, other companies in the industry with market capitalizations below AU$270m, reported a median total CEO compensation of AU$655k. Hence, we can conclude that Mark Bouris is remunerated higher than the industry median. Furthermore, Mark Bouris directly owns AU$209k worth of shares in the company.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$1.1m | AU$1.1m | 100% |
Other | - | AU$12k | - |
Total Compensation | AU$1.1m | AU$1.1m | 100% |
Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. On a company level, Yellow Brick Road Holdings prefers to reward its CEO through a salary, opting not to pay Mark Bouris through non-salary benefits. 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.
Yellow Brick Road Holdings Limited's Growth
Over the past three years, Yellow Brick Road Holdings Limited has seen its earnings per share (EPS) grow by 73% per year. It saw its revenue drop 6.4% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Yellow Brick Road Holdings Limited Been A Good Investment?
Given the total shareholder loss of 14% over three years, many shareholders in Yellow Brick Road Holdings Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Yellow Brick Road Holdings rewards its CEO solely through a salary, ignoring non-salary benefits completely. Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. 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.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Yellow Brick Road Holdings that investors should look into moving forward.
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.
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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