Yahoo Finance SportsHero Limited's (ASX:SHO) CEO Might Not Expect Shareholders To Be So Generous This Year
Key Insights
SportsHero to hold its Annual General Meeting on 24th of November
CEO Tom Tonavanik's total compensation includes salary of US$161.3k
The overall pay is comparable to the industry average
SportsHero's EPS declined by 0.7% over the past three years while total shareholder loss over the past three years was 36%
The results at SportsHero Limited (ASX:SHO) have been quite disappointing recently and CEO Tom Tonavanik bears some responsibility for this. At the upcoming AGM on 24th of November, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.
See our latest analysis for SportsHero
Comparing SportsHero Limited's CEO Compensation With The Industry
According to our data, SportsHero Limited has a market capitalization of AU$12m, and paid its CEO total annual compensation worth US$161k over the year to June 2023. That's slightly lower by 4.4% over the previous year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$161k.
In comparison with other companies in the Australia Entertainment industry with market capitalizations under AU$308m, the reported median total CEO compensation was US$192k. From this we gather that Tom Tonavanik is paid around the median for CEOs in the industry. Moreover, Tom Tonavanik also holds AU$289k worth of SportsHero stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$161k | US$147k | 100% |
Other | - | US$22k | - |
Total Compensation | US$161k | US$169k | 100% |
On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. Speaking on a company level, SportsHero prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
SportsHero Limited's Growth
Over the last three years, SportsHero Limited has not seen its earnings per share change much, though they have deteriorated slightly. It saw its revenue drop 60% over the last year.
Its a bit disappointing to see that the company has failed to grow its EPS. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has SportsHero Limited Been A Good Investment?
Few SportsHero Limited shareholders would feel satisfied with the return of -36% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
SportsHero rewards its CEO solely through a salary, ignoring non-salary benefits completely. Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
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 did our research and spotted 4 warning signs for SportsHero that investors should look into moving forward.
Important note: SportsHero is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
