Kevin Pallas has been the CEO of Engenco Limited (ASX:EGN) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Engenco
How Does Kevin Pallas's Compensation Compare With Similar Sized Companies?
Our data indicates that Engenco Limited is worth AU$160m, and total annual CEO compensation is AU$536k. (This is based on the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$388k. We took a group of companies with market capitalizations below AU$288m, and calculated the median CEO total compensation to be AU$355k.
As you can see, Kevin Pallas is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Engenco Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Engenco has changed over time.
Is Engenco Limited Growing?
Engenco Limited has increased its earnings per share (EPS) by an average of 61% a year, over the last three years (using a line of best fit). Its revenue is up 15% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
Has Engenco Limited Been A Good Investment?
Most shareholders would probably be pleased with Engenco Limited for providing a total return of 451% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
We compared the total CEO remuneration paid by Engenco Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Engenco (free visualization of insider trades).
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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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Thank you for reading.