A Look At Finbar Group's (ASX:FRI) CEO Remuneration

Darren Pateman became the CEO of Finbar Group Limited (ASX:FRI) in 2010, 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 assess whether Finbar Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Finbar Group

How Does Total Compensation For Darren Pateman Compare With Other Companies In The Industry?

Our data indicates that Finbar Group Limited has a market capitalization of AU$197m, and total annual CEO compensation was reported as AU$980k for the year to June 2019. That's a notable decrease of 8.7% on last year. We note that the salary portion, which stands at AU$669.5k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below AU$292m, reported a median total CEO compensation of AU$512k. Accordingly, our analysis reveals that Finbar Group Limited pays Darren Pateman north of the industry median. Moreover, Darren Pateman also holds AU$2.6m worth of Finbar Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. In Finbar Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Finbar Group Limited's Growth Numbers

Over the past three years, Finbar Group Limited has seen its earnings per share (EPS) grow by 42% per year. In the last year, its revenue is up 23%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Finbar Group Limited Been A Good Investment?

Finbar Group Limited has served shareholders reasonably well, with a total return of 11% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, Finbar Group Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't say CEO compensation problematic.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 5 warning signs (and 2 which are potentially serious) in Finbar Group we think you should know about.

Switching gears from Finbar Group, 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.

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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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