Does Synertec's (ASX:SOP) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to Michael Carroll who has served as CEO of Synertec Corporation Limited (ASX:SOP) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Synertec

Comparing Synertec Corporation Limited's CEO Compensation With the industry

According to our data, Synertec Corporation Limited has a market capitalization of AU$19m, and paid its CEO total annual compensation worth AU$365k over the year to June 2020. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at AU$333.3k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under AU$261m, the reported median total CEO compensation was AU$446k. This suggests that Synertec remunerates its CEO largely in line with the industry average.

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. According to our research, Synertec has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Synertec Corporation Limited's Growth Numbers

Synertec Corporation Limited has seen its earnings per share (EPS) increase by 34% a year over the past three years. Its revenue is down 54% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Synertec Corporation Limited Been A Good Investment?

Most shareholders would probably be pleased with Synertec Corporation Limited for providing a total return of 68% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we noted earlier, Synertec pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Michael is compensated rather modestly, given the solid company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Synertec you should be aware of, and 1 of them can't be ignored.

Switching gears from Synertec, 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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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.
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