Andrew Wilson has been the CEO of Senetas Corporation Limited (ASX:SEN) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. 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 Andrew Wilson’s Compensation Compare With Similar Sized Companies?
According to our data, Senetas Corporation Limited has a market capitalization of AU$76m, and paid its CEO total annual compensation worth AU$493k over the year to June 2019. That’s actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at AU$412k. We examined a group of similar sized companies, with market capitalizations of below AU$295m. The median CEO total compensation in that group is AU$373k.
As you can see, Andrew Wilson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Senetas Corporation Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Senetas, below.
Is Senetas Corporation Limited Growing?
Over the last three years Senetas Corporation Limited has shrunk its earnings per share by an average of 77% per year (measured with a line of best fit). In the last year, its revenue is up 12%.
Sadly for shareholders, earnings per share are actually down, over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Senetas Corporation Limited Been A Good Investment?
Since shareholders would have lost about 35% over three years, some Senetas Corporation Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount Senetas Corporation Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. Arguably worse, investors are without a positive return for the last three years. This analysis suggests to us that the CEO is paid too generously! Shareholders may want to check for free if Senetas insiders are buying or selling shares.
Important note: Senetas 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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