Why Tassal Group’s (ASX:TGR) CEO Pay Matters

This article will reflect on the compensation paid to Mark Ryan who has served as CEO of Tassal Group Limited (ASX:TGR) since 2003. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Tassal Group.

See our latest analysis for Tassal Group

How Does Total Compensation For Mark Ryan Compare With Other Companies In The Industry?

Our data indicates that Tassal Group Limited has a market capitalization of AU$743m, and total annual CEO compensation was reported as AU$1.3m for the year to June 2020. That’s a fairly small increase of 4.3% over the previous year. Notably, the salary which is AU$738.8k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from AU$283m to AU$1.1b, the reported median CEO total compensation was AU$857k. Accordingly, our analysis reveals that Tassal Group Limited pays Mark Ryan north of the industry median. Moreover, Mark Ryan also holds AU$835k worth of Tassal Group stock directly under their own name.

Component20202019Proportion (2020)
Salary AU$739k AU$719k 58%
Other AU$524k AU$492k 42%
Total CompensationAU$1.3m AU$1.2m100%

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. In Tassal Group’s case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ASX:TGR CEO Compensation September 30th 2020

Tassal Group Limited’s Growth

Tassal Group Limited has reduced its earnings per share by 3.0% a year over the last three years. Revenue was pretty flat on last year.

The lack of EPS growth is certainly unimpressive. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Tassal Group Limited Been A Good Investment?

With a total shareholder return of 5.7% over three years, Tassal Group Limited has done okay by shareholders. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude…

As we touched on above, Tassal Group Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Unfortunately, EPS has not grown in three years, failing to impress us. While shareholder returns are acceptable, they don’t delight. So you can understand why we do not think CEO compensation is particularly modest!

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We’ve identified 1 warning sign for Tassal Group that investors should be aware of in a dynamic business environment.

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

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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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