The CEO of Freelancer Limited (ASX:FLN) is Matt Barrie. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Matt Barrie’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Freelancer Limited has a market cap of AU$319m, and is paying total annual CEO compensation of AU$604k. (This number is for the twelve months until December 2018). That’s less than last year. While we always look at total compensation first, we note that the salary component is less, at AU$569k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$142m to AU$567m. The median total CEO compensation was AU$788k.
That means Matt Barrie receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Freelancer has changed over time.
Is Freelancer Limited Growing?
Over the last three years Freelancer Limited has shrunk its earnings per share by an average of 19% per year (measured with a line of best fit). Its revenue is up 3.1% over last year.
Unfortunately, earnings per share have trended lower over the last three years. The modest increase in revenue in the last year isn’t enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Freelancer Limited Been A Good Investment?
Given the total loss of 48% over three years, many shareholders in Freelancer Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Matt Barrie is paid around what is normal the leaders of comparable size companies.
The company isn’t growing EPS, and shareholder returns have been disappointing. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. So you may want to check if insiders are buying Freelancer shares with their own money (free access).
Important note: Freelancer 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.
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