Yahoo Finance This Is Why Innlanz Limited's (ASX:INL) CEO Compensation Looks Appropriate
Key Insights
Innlanz's Annual General Meeting to take place on 16th of November
Total pay for CEO Yesh Mudaliar includes AU$100.0k salary
The total compensation is 86% less than the average for the industry
Over the past three years, Innlanz's EPS grew by 87% and over the past three years, the total loss to shareholders 88%
Performance at Innlanz Limited (ASX:INL) has been rather uninspiring recently and shareholders may be wondering how CEO Yesh Mudaliar plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 16th of November. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.
See our latest analysis for Innlanz
Comparing Innlanz Limited's CEO Compensation With The Industry
At the time of writing, our data shows that Innlanz Limited has a market capitalization of AU$3.4m, and reported total annual CEO compensation of AU$111k for the year to June 2023. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at AU$100.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the Australian Specialty Retail industry with market capitalizations below AU$315m, we found that the median total CEO compensation was AU$815k. This suggests that Yesh Mudaliar is paid below the industry median.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$100k | AU$100k | 90% |
Other | AU$11k | AU$10k | 10% |
Total Compensation | AU$111k | AU$110k | 100% |
Speaking on an industry level, nearly 53% of total compensation represents salary, while the remainder of 47% is other remuneration. According to our research, Innlanz has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.
Innlanz Limited's Growth
Over the past three years, Innlanz Limited has seen its earnings per share (EPS) grow by 87% per year. Its revenue is up 66% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Innlanz Limited Been A Good Investment?
With a total shareholder return of -88% over three years, Innlanz Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
In Summary...
The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Innlanz (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Important note: Innlanz 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.
