Laurence Baynham has been the CEO of Data#3 Limited (ASX:DTL) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Laurence Baynham's Compensation Compare With Similar Sized Companies?
According to our data, Data#3 Limited has a market capitalization of AU$356m, and pays its CEO total annual compensation worth AU$880k. (This figure is for the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$515k. When we examined a selection of companies with market caps ranging from AU$148m to AU$590m, we found the median CEO total compensation was AU$712k.
So Laurence Baynham is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Data#3, below.
Is Data#3 Limited Growing?
Over the last three years Data#3 Limited has grown its earnings per share (EPS) by an average of 7.1% per year (using a line of best fit). In the last year, its revenue is up 20%.
I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. You might want to check this free visual report on analyst forecasts for future earnings.
Has Data#3 Limited Been A Good Investment?
I think that the total shareholder return of 94%, over three years, would leave most Data#3 Limited shareholders smiling. 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.
Laurence Baynham is paid around what is normal the leaders of comparable size companies.
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So all things considered I'd venture that the CEO pay is appropriate. Shareholders may want to check for free if Data#3 insiders are buying or selling shares.
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.
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