Is Cellnet Group Limited's (ASX:CLT) CEO Paid Enough Relative To Peers?

In 2014 Alan Sparks was appointed CEO of Cellnet Group Limited (ASX:CLT). 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Cellnet Group

How Does Alan Sparks's Compensation Compare With Similar Sized Companies?

According to our data, Cellnet Group Limited has a market capitalization of AU$12m, and paid its CEO total annual compensation worth AU$344k over the year to June 2019. That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at AU$292k. We took a group of companies with market capitalizations below AU$292m, and calculated the median CEO total compensation to be AU$378k.

So Alan Sparks receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

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

Is Cellnet Group Limited Growing?

Cellnet Group Limited has increased its earnings per share (EPS) by an average of 17% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 27%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Cellnet Group Limited Been A Good Investment?

Given the total loss of 24% over three years, many shareholders in Cellnet Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Alan Sparks is paid around what is normal the leaders of comparable size companies.

We'd say the company can boast of its EPS growth, but it's disappointing to see negative shareholder returns over three years. We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. Shareholders may want to check for free if Cellnet Group insiders are buying or selling shares.

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

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.

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. Thank you for reading.