Matt Barrie is the CEO of Freelancer Limited (ASX:FLN). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Matt Barrie’s Compensation Compare With Similar Sized Companies?
According to our data, Freelancer Limited has a market capitalization of AU$183m, and paid its CEO total annual compensation worth AU$602k over the year to December 2019. That’s below the compensation, last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$569k. We examined a group of similar sized companies, with market capitalizations of below AU$312m. The median CEO total compensation in that group is AU$390k.
Next, let’s break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. Freelancer does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
It would therefore appear that Freelancer Limited pays Matt Barrie more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see a visual representation of the CEO compensation at Freelancer, below.
Is Freelancer Limited Growing?
Freelancer Limited has seen earnings per share (EPS) move positively by an average of 14% a year, over the last three years (using a line of best fit). Its revenue is up 12% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and 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 Freelancer Limited Been A Good Investment?
With a three year total loss of 53%, Freelancer Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount Freelancer Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Moving away from CEO compensation for the moment, we’ve identified 2 warning signs for Freelancer that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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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