Yahoo Finance Our View On Pearl Global's (ASX:PG1) CEO Pay
Andrew Drennan became the CEO of Pearl Global Limited (ASX:PG1) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Pearl Global.
Check out our latest analysis for Pearl Global
Comparing Pearl Global Limited's CEO Compensation With the industry
At the time of writing, our data shows that Pearl Global Limited has a market capitalization of AU$35m, and reported total annual CEO compensation of AU$333k for the year to June 2020. That's just a smallish increase of 7.3% on last year. We note that the salary portion, which stands at AU$318.1k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$258m, reported a median total CEO compensation of AU$368k. So it looks like Pearl Global compensates Andrew Drennan in line with the median for the industry. Furthermore, Andrew Drennan directly owns AU$1.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$318k | AU$294k | 95% |
Other | AU$15k | AU$17k | 5% |
Total Compensation | AU$333k | AU$310k | 100% |
Speaking on an industry level, nearly 71% of total compensation represents salary, while the remainder of 29% is other remuneration. Investors will find it interesting that Pearl Global pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Pearl Global Limited's Growth Numbers
Over the past three years, Pearl Global Limited has seen its earnings per share (EPS) grow by 42% per year. In the last year, its revenue is up 982%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Pearl Global Limited Been A Good Investment?
Since shareholders would have lost about 65% over three years, some Pearl Global Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Andrew receives almost all of their compensation through a salary. As previously discussed, Andrew is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. However, EPS growth is positive over the same time frame. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for Pearl Global you should be aware of, and 3 of them are a bit unpleasant.
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. 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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