James Embelton became the CEO of Embelton Limited (ASX:EMB) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does James Embelton’s Compensation Compare With Similar Sized Companies?
Our data indicates that Embelton Limited is worth AU$26m, and total annual CEO compensation is AU$496k. (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$343k. We examined a group of similar sized companies, with market capitalizations of below AU$291m. The median CEO total compensation in that group is AU$357k.
As you can see, James Embelton is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Embelton 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.
The graphic below shows how CEO compensation at Embelton has changed from year to year.
Is Embelton Limited Growing?
On average over the last three years, Embelton Limited has grown earnings per share (EPS) by 13% each year (using a line of best fit). It achieved revenue growth of 52% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Embelton Limited Been A Good Investment?
Most shareholders would probably be pleased with Embelton Limited for providing a total return of 66% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Embelton 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.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Embelton insiders are buying or selling shares.
Important note: Embelton 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.
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 email@example.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.