Yahoo Finance We Think Some Shareholders May Hesitate To Increase EDU Holdings Limited's (ASX:EDU) CEO Compensation
Key Insights
EDU Holdings will host its Annual General Meeting on 16th of May
Total pay for CEO Adam Davis includes AU$318.0k salary
The total compensation is similar to the average for the industry
Over the past three years, EDU Holdings' EPS fell by 75% and over the past three years, the total loss to shareholders 42%
The underwhelming share price performance of EDU Holdings Limited (ASX:EDU) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 16th of May, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.
See our latest analysis for EDU Holdings
How Does Total Compensation For Adam Davis Compare With Other Companies In The Industry?
Our data indicates that EDU Holdings Limited has a market capitalization of AU$16m, and total annual CEO compensation was reported as AU$504k for the year to December 2023. That's a modest increase of 6.5% on the prior year. We note that the salary portion, which stands at AU$318.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the Australian Consumer Services industry with market capitalizations under AU$304m, the reported median total CEO compensation was AU$497k. So it looks like EDU Holdings compensates Adam Davis in line with the median for the industry. Furthermore, Adam Davis directly owns AU$990k worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$318k | AU$300k | 63% |
Other | AU$186k | AU$173k | 37% |
Total Compensation | AU$504k | AU$473k | 100% |
Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. Although there is a difference in how total compensation is set, EDU Holdings more or less reflects the market in terms of setting the salary. 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.
A Look at EDU Holdings Limited's Growth Numbers
Over the last three years, EDU Holdings Limited has shrunk its earnings per share by 75% per year. It achieved revenue growth of 20% over the last year.
The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has EDU Holdings Limited Been A Good Investment?
The return of -42% over three years would not have pleased EDU Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. 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.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 2 warning signs for EDU Holdings (1 can't be ignored!) that you should be aware of before investing here.
Switching gears from EDU Holdings, 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.
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.
