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We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Dropsuite Limited's (ASX:DSE) CEO For Now

Key Insights

  • Dropsuite will host its Annual General Meeting on 21st of May

  • Salary of AU$402.5k is part of CEO Charif El-Ansari's total remuneration

  • The overall pay is 52% above the industry average

  • Dropsuite's total shareholder return over the past three years was 41% while its EPS grew by 116% over the past three years

Performance at Dropsuite Limited (ASX:DSE) has been reasonably good and CEO Charif El-Ansari has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 21st of May. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Dropsuite

How Does Total Compensation For Charif El-Ansari Compare With Other Companies In The Industry?

At the time of writing, our data shows that Dropsuite Limited has a market capitalization of AU$181m, and reported total annual CEO compensation of AU$737k for the year to December 2023. That's a notable increase of 43% on last year. Notably, the salary which is AU$402.5k, represents a considerable chunk of the total compensation being paid.

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For comparison, other companies in the Australian Software industry with market capitalizations below AU$303m, reported a median total CEO compensation of AU$484k. This suggests that Charif El-Ansari is paid more than the median for the industry. Furthermore, Charif El-Ansari directly owns AU$9.0m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2023

2022

Proportion (2023)

Salary

AU$403k

AU$341k

55%

Other

AU$334k

AU$172k

45%

Total Compensation

AU$737k

AU$513k

100%

Talking in terms of the industry, salary represented approximately 57% of total compensation out of all the companies we analyzed, while other remuneration made up 43% of the pie. Our data reveals that Dropsuite allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

Dropsuite Limited's Growth

Dropsuite Limited has seen its earnings per share (EPS) increase by 116% a year over the past three years. It achieved revenue growth of 48% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Dropsuite Limited Been A Good Investment?

Most shareholders would probably be pleased with Dropsuite Limited for providing a total return of 41% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Dropsuite that investors should be aware of in a dynamic business environment.

Important note: Dropsuite 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.

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.