Is Cycliq Group Limited’s (ASX:CYQ) CEO Pay Fair?

Paul Claessen is the CEO of Cycliq Group Limited (ASX:CYQ). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Cycliq Group

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

At the time of writing, our data says that Cycliq Group Limited has a market cap of AU$1.9m, and reported total annual CEO compensation of AU$199k for 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 looked at a group of companies with market capitalizations under AU$343m, and the median CEO total compensation was AU$403k.

Next, let’s break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 65% of total compensation out of all the companies we analysed, while other remuneration made up 35% of the pie. So it seems like there isn’t a significant difference between Cycliq Group and the broader market, in terms of salary allocation in the overall compensation package.

This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you’ll need to understand the business better before you can form an opinion. The graphic below shows how CEO compensation at Cycliq Group has changed from year to year.

ASX:CYQ CEO Compensation, March 19th 2020
ASX:CYQ CEO Compensation, March 19th 2020

Is Cycliq Group Limited Growing?

On average over the last three years, Cycliq Group Limited has grown earnings per share (EPS) by 66% each year (using a line of best fit). It saw its revenue drop 32% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

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

Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Paul Claessen is generously paid, it would be good to see an improvement in business performance before too an increase in pay. 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. On another note, Cycliq Group has 6 warning signs (and 4 which are concerning) we think you should know about.

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 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.