Does Beam Communications Holdings Limited's (ASX:BCC) CEO Pay Reflect Performance?

Michael Capocchi became the CEO of Beam Communications Holdings Limited (ASX:BCC) in 2008. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Beam Communications Holdings

How Does Michael Capocchi's Compensation Compare With Similar Sized Companies?

Our data indicates that Beam Communications Holdings Limited is worth AU$15m, and total annual CEO compensation was reported as AU$736k for the year to June 2019. Notably, that's an increase of 22% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at AU$419k. We looked at a group of companies with market capitalizations under AU$296m, and the median CEO total compensation was AU$374k.

As you can see, Michael Capocchi is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Beam Communications Holdings Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

You can see, below, how CEO compensation at Beam Communications Holdings has changed over time.

Is Beam Communications Holdings Limited Growing?

On average over the last three years, Beam Communications Holdings Limited has shrunk earnings per share by 25% each year (measured with a line of best fit). In the last year, its revenue is up 59%.

The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch.

Has Beam Communications Holdings Limited Been A Good Investment?

With a three year total loss of 4.0%, Beam Communications Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Beam Communications Holdings Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. This contrasts with the growth in CEO remuneration, in the last year. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Beam Communications Holdings.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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