In 2014 Peter Rowland was appointed CEO of Micro-X Limited (ASX:MX1). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Peter Rowland’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Micro-X Limited has a market cap of AU$41m, and reported total annual CEO compensation of AU$304k for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$278k. We took a group of companies with market capitalizations below AU$315m, and calculated the median CEO total compensation to be AU$389k.
Next, let’s break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 79% of total compensation represents salary and 21% is other remuneration. Micro-X does not set aside a larger portion of remuneration in the form of salary, maintaining the same rate as the wider market.
So Peter Rowland 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 Micro-X has changed from year to year.
Is Micro-X Limited Growing?
On average over the last three years, Micro-X Limited has seen earnings per share (EPS) move in a favourable direction by 14% each year (using a line of best fit). In the last year, its revenue is up 2.8%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Micro-X Limited Been A Good Investment?
Given the total loss of 60% over three years, many shareholders in Micro-X Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Peter Rowland is paid around what is normal for 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. Considering the the positives we don’t think the CEO pays is too high, but it’s certainly hard to argue it is too low. Looking into other areas, we’ve picked out 5 warning signs for Micro-X that investors should think about before committing capital to this stock.
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.
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.