A Quick Analysis On Shriro Holdings' (ASX:SHM) CEO Salary

Tim Hargreaves has been the CEO of Shriro Holdings Limited (ASX:SHM) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Shriro Holdings.

Check out our latest analysis for Shriro Holdings

Comparing Shriro Holdings Limited's CEO Compensation With the industry

Our data indicates that Shriro Holdings Limited has a market capitalization of AU$50m, and total annual CEO compensation was reported as AU$763k for the year to December 2019. That's a notable increase of 10% on last year. In particular, the salary of AU$575.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$288m, reported a median total CEO compensation of AU$431k. This suggests that Tim Hargreaves is paid more than the median for the industry. What's more, Tim Hargreaves holds AU$145k worth of shares in the company in their own name.

Speaking on an industry level, nearly 72% of total compensation represents salary, while the remainder of 28% is other remuneration. Although there is a difference in how total compensation is set, Shriro Holdings more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Shriro Holdings Limited's Growth

Over the last three years, Shriro Holdings Limited has shrunk its earnings per share by 21% per year. Its revenue is down 5.0% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Shriro Holdings Limited Been A Good Investment?

With a three year total loss of 43% for the shareholders, Shriro Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Shriro Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Shriro Holdings that investors should look into moving forward.

Important note: Shriro Holdings 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. 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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