Is HiTech Group Australia Limited’s (ASX:HIT) CEO Being Overpaid?

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In 2016 Elias Hazouri was appointed CEO of HiTech Group Australia Limited (ASX:HIT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for HiTech Group Australia

How Does Elias Hazouri’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that HiTech Group Australia Limited has a market cap of AU$40m, and is paying total annual CEO compensation of AU$374k. (This figure is for the year to June 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth AU$374k. We examined a group of similar sized companies, with market capitalizations of below AU$287m. The median CEO total compensation in that group is AU$354k.

So Elias Hazouri receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at HiTech Group Australia has changed over time.

ASX:HIT CEO Compensation, July 9th 2019
ASX:HIT CEO Compensation, July 9th 2019

Is HiTech Group Australia Limited Growing?

HiTech Group Australia Limited has increased its earnings per share (EPS) by an average of 7.1% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 9.1%.

I’m not particularly impressed by the revenue growth, but I’m happy with the modest EPS growth. It’s clear the performance has been quite decent, but it it falls short of outstanding,based on this information.

Has HiTech Group Australia Limited Been A Good Investment?

I think that the total shareholder return of 244%, over three years, would leave most HiTech Group Australia Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

Elias Hazouri is paid around what is normal the leaders of comparable size companies.

While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So considering most shareholders would be happy, we’d say the CEO pay is appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling HiTech Group Australia (free visualization of insider trades).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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 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.