Does Cycliq Group Limited’s (ASX:CYQ) CEO Salary Reflect Performance?

The CEO of Cycliq Group Limited (ASX:CYQ) is Paul Claessen. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Cycliq Group

How Does Paul Claessen’s Compensation Compare With Similar Sized Companies?

According to our data, Cycliq Group Limited has a market capitalization of AU$1.7m, and paid its CEO total annual compensation worth AU$199k over the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$134k. We took a group of companies with market capitalizations below AU$292m, and calculated the median CEO total compensation to be AU$373k.

Most shareholders would consider it a positive that Paul Claessen takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

The graphic below shows how CEO compensation at Cycliq Group has changed from year to year.

ASX:CYQ CEO Compensation, December 5th 2019
ASX:CYQ CEO Compensation, December 5th 2019

Is Cycliq Group Limited Growing?

On average over the last three years, Cycliq Group Limited has grown earnings per share (EPS) by 43% each year (using a line of best fit). In the last year, its revenue is down 4.0%.

This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. 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 Cycliq Group Limited Been A Good Investment?

With a three year total loss of 97%, Cycliq Group Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

It looks like Cycliq Group Limited pays its CEO less than similar sized companies.

Many would consider this to indicate that the pay is modest since the business is growing. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We’re not critical of the remuneration Paul Claessen receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. So you may want to check if insiders are buying Cycliq Group shares with their own money (free access).

Important note: Cycliq Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.