What We Learned About Pearl Global's (ASX:PG1) CEO Compensation

By
Simply Wall St
Published
February 12, 2021
ASX:PG1
Source: Shutterstock

This article will reflect on the compensation paid to Andrew Drennan who has served as CEO of Pearl Global Limited (ASX:PG1) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Pearl Global.

View our latest analysis for Pearl Global

Comparing Pearl Global Limited's CEO Compensation With the industry

At the time of writing, our data shows that Pearl Global Limited has a market capitalization of AU$37m, and reported total annual CEO compensation of AU$333k for the year to June 2020. That's a fairly small increase of 7.3% over the previous year. Notably, the salary which is AU$318.1k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$258m, the reported median total CEO compensation was AU$332k. So it looks like Pearl Global compensates Andrew Drennan in line with the median for the industry. Furthermore, Andrew Drennan directly owns AU$1.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary AU$318k AU$294k 95%
Other AU$15k AU$17k 5%
Total CompensationAU$333k AU$310k100%

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. Pearl Global is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ASX:PG1 CEO Compensation February 13th 2021

Pearl Global Limited's Growth

Pearl Global Limited's earnings per share (EPS) grew 42% per year over the last three years. It achieved revenue growth of 982% 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. 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 Pearl Global Limited Been A Good Investment?

Since shareholders would have lost about 65% over three years, some Pearl Global Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Andrew receives almost all of their compensation through a salary. As we touched on above, Pearl Global Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. But on the bright side, EPS growth is positive over the same period. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 5 warning signs for Pearl Global (of which 3 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

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.

If you decide to trade Pearl Global, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted


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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.