The CEO of Skyfii Limited (ASX:SKF) is Wayne Arthur. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Wayne Arthur’s Compensation Compare With Similar Sized Companies?
Our data indicates that Skyfii Limited is worth AU$54m, and total annual CEO compensation was reported as AU$503k for the year to June 2019. Notably, that’s an increase of 88% over the year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$233k. We looked at a group of companies with market capitalizations under AU$293m, and the median CEO total compensation was AU$374k.
It would therefore appear that Skyfii Limited pays Wayne Arthur 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Skyfii has changed from year to year.
Is Skyfii Limited Growing?
Skyfii Limited has increased its earnings per share (EPS) by an average of 59% a year, over the last three years (using a line of best fit). It achieved revenue growth of 50% over the last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Skyfii Limited Been A Good Investment?
Most shareholders would probably be pleased with Skyfii Limited for providing a total return of 143% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Skyfii Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. So you may want to check if insiders are buying Skyfii shares with their own money (free access).
Important note: Skyfii 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 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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