This article will reflect on the compensation paid to Mike Pivac who has served as CEO of FBR Limited (ASX:FBR) since 2015. This analysis will also assess whether FBR pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for FBR
How Does Total Compensation For Mike Pivac Compare With Other Companies In The Industry?
At the time of writing, our data shows that FBR Limited has a market capitalization of AU$109m, and reported total annual CEO compensation of AU$510k for the year to June 2020. We note that's a decrease of 17% compared to last year. We note that the salary portion, which stands at AU$375.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$259m, the reported median total CEO compensation was AU$350k. Accordingly, our analysis reveals that FBR Limited pays Mike Pivac north of the industry median. Furthermore, Mike Pivac directly owns AU$6.4m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$375k | AU$375k | 74% |
| Other | AU$135k | AU$242k | 26% |
| Total Compensation | AU$510k | AU$617k | 100% |
Talking in terms of the industry, salary represented approximately 84% of total compensation out of all the companies we analyzed, while other remuneration made up 16% of the pie. In FBR's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
FBR Limited's Growth
FBR Limited's earnings per share (EPS) grew 5.9% per year over the last three years. Its revenue is up 70% over the last year.
It's hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has FBR Limited Been A Good Investment?
With a three year total loss of 67% for the shareholders, FBR Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we touched on above, FBR 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. Over the last three years, shareholder returns have been downright disappointing for FBR, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look good when you see that Mike is earning more than the industry median. All things considered, we believe shareholders would be disappointed to see Mike's compensation grow without first seeing an improvement in the performance of the company.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 5 warning signs (and 2 which are a bit concerning) in FBR we think you should know about.
Switching gears from FBR, 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. 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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About ASX:FBR
Excellent balance sheet low.
