We Discuss Why The CEO Of Lycopodium Limited (ASX:LYL) Is Due For A Pay Rise

Key Insights

• Lycopodium's Annual General Meeting to take place on 14th of November
• Salary of AU$714.5k is part of CEO Pietro De Leo's total remuneration
• The overall pay is 32% below the industry average
• Lycopodium's total shareholder return over the past three years was 192% while its EPS grew by 58% over the past three years

The impressive results at Lycopodium Limited (ASX:LYL) recently will be great news for shareholders. At the upcoming AGM on 14th of November, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

See our latest analysis for Lycopodium

How Does Total Compensation For Pietro De Leo Compare With Other Companies In The Industry?

According to our data, Lycopodium Limited has a market capitalization of AU$378m, and paid its CEO total annual compensation worth AU$884k over the year to June 2023. We note that's an increase of 15% above last year. We note that the salary portion, which stands at AU$714.5k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Australian Construction industry with market capitalizations ranging between AU$156m and AU$623m had a median total CEO compensation of AU$1.3m. Accordingly, Lycopodium pays its CEO under the industry median. Furthermore, Pietro De Leo directly owns AU$9.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	AU$715k	AU$613k	81%
Other	AU$170k	AU$157k	19%
Total Compensation	AU$884k	AU$770k	100%

On an industry level, roughly 63% of total compensation represents salary and 37% is other remuneration. Lycopodium pays out 81% of remuneration in the form of a salary, significantly higher than the industry average. 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.

Lycopodium Limited's Growth

Lycopodium Limited's earnings per share (EPS) grew 58% per year over the last three years. It achieved revenue growth of 42% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Lycopodium Limited Been A Good Investment?

Most shareholders would probably be pleased with Lycopodium Limited for providing a total return of 192% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed 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. That's why we did some digging and identified 1 warning sign for Lycopodium that you should be aware of before investing.

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. 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.