We Discuss Why The CEO Of The Environmental Group Limited (ASX:EGL) Is Due For A Pay Rise

Key Insights

• Environmental Group's Annual General Meeting to take place on 20th of November
• Total pay for CEO Jason Dixon includes AU$279.1k salary
• Total compensation is 44% below industry average
• Environmental Group's EPS grew by 74% over the past three years while total shareholder return over the past three years was 539%

Shareholders will be pleased by the impressive results for The Environmental Group Limited (ASX:EGL) recently and CEO Jason Dixon has played a key role. This would be kept in mind at the upcoming AGM on 20th of November which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

See our latest analysis for Environmental Group

How Does Total Compensation For Jason Dixon Compare With Other Companies In The Industry?

At the time of writing, our data shows that The Environmental Group Limited has a market capitalization of AU$86m, and reported total annual CEO compensation of AU$415k for the year to June 2023. That's a modest increase of 6.8% on the prior year. We note that the salary portion, which stands at AU$279.1k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Australian Machinery industry with market capitalizations under AU$314m, the reported median total CEO compensation was AU$737k. Accordingly, Environmental Group pays its CEO under the industry median. What's more, Jason Dixon holds AU$4.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	AU$279k	AU$272k	67%
Other	AU$136k	AU$117k	33%
Total Compensation	AU$415k	AU$389k	100%

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. According to our research, Environmental Group has allocated a higher percentage of pay to salary in comparison to the wider 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.

The Environmental Group Limited's Growth

The Environmental Group Limited has seen its earnings per share (EPS) increase by 74% a year over the past three years. In the last year, its revenue is up 45%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 The Environmental Group Limited Been A Good Investment?

We think that the total shareholder return of 539%, over three years, would leave most The Environmental Group Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for Environmental Group that investors should be aware of in a dynamic business environment.

Switching gears from Environmental Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.