Elias Hazouri became the CEO of HiTech Group Australia Limited (ASX:HIT) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Elias Hazouri Compare With Other Companies In The Industry?
According to our data, HiTech Group Australia Limited has a market capitalization of AU$76m, and paid its CEO total annual compensation worth AU$505k over the year to June 2020. Notably, that's an increase of 26% over the year before. We note that the salary portion, which stands at AU$450.1k 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$445k. So it looks like HiTech Group Australia compensates Elias Hazouri in line with the median for the industry. Moreover, Elias Hazouri also holds AU$15m worth of HiTech Group Australia stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. According to our research, HiTech Group Australia has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at HiTech Group Australia Limited's Growth Numbers
HiTech Group Australia Limited's earnings per share (EPS) grew 10% per year over the last three years. It achieved revenue growth of 10% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has HiTech Group Australia Limited Been A Good Investment?
Most shareholders would probably be pleased with HiTech Group Australia Limited for providing a total return of 166% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Elias is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for HiTech Group Australia that investors should look into moving forward.
Switching gears from HiTech Group Australia, 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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