Steven Dabelstein became the CEO of HRL Holdings Limited (ASX:HRL) in 2015, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also assess whether HRL Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for HRL Holdings
How Does Total Compensation For Steven Dabelstein Compare With Other Companies In The Industry?
Our data indicates that HRL Holdings Limited has a market capitalization of AU$49m, and total annual CEO compensation was reported as AU$404k for the year to June 2020. That’s mostly flat as compared to the prior year’s compensation. We note that the salary portion, which stands at AU$285.0k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$279m, reported a median total CEO compensation of AU$357k. From this we gather that Steven Dabelstein is paid around the median for CEOs in the industry. Furthermore, Steven Dabelstein directly owns AU$186k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$285k | AU$300k | 71% |
| Other | AU$119k | AU$93k | 29% |
| Total Compensation | AU$404k | AU$393k | 100% |
Talking in terms of the industry, salary represented approximately 66% of total compensation out of all the companies we analyzed, while other remuneration made up 34% of the pie. Although there is a difference in how total compensation is set, HRL Holdings more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.
HRL Holdings Limited’s Growth
Over the last three years, HRL Holdings Limited has shrunk its earnings per share by 57% per year. It achieved revenue growth of 6.7% over the last year.
Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn’t enough to make us overlook the disappointing change in EPS. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what’s coming up next but if you want to peer into the company’s future you might be interested in this free visualization of analyst forecasts.
Has HRL Holdings Limited Been A Good Investment?
HRL Holdings Limited has served shareholders reasonably well, with a total return of 14% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
In Summary…
As previously discussed, Steven is compensated close to the median for companies of its size, and which belong to the same industry. HRL Holdings has had a tough time in recent years, with declining EPS growth, and although shareholder returns are stable, they are hardly worth celebrating. This doesn’t compare well with CEO compensation, which is largely in line with the industry median. We would stop short of the compensation is inappropriate, but we can’t say the executive is underpaid.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for HRL Holdings that investors should look into moving forward.
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.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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