A Look At Threat Protect Australia's (ASX:TPS) CEO Remuneration

Demetrios Pynes has been the CEO of Threat Protect Australia Limited (ASX:TPS) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Threat Protect Australia pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Threat Protect Australia

How Does Total Compensation For Demetrios Pynes Compare With Other Companies In The Industry?

Our data indicates that Threat Protect Australia Limited has a market capitalization of AU$9.6m, and total annual CEO compensation was reported as AU$302k for the year to June 2020. That's a fairly small increase of 7.7% over the previous year. Notably, the salary which is AU$262.4k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$262m, reported a median total CEO compensation of AU$368k. So it looks like Threat Protect Australia compensates Demetrios Pynes in line with the median for the industry. Furthermore, Demetrios Pynes directly owns AU$198k worth of shares in the company.

On an industry level, roughly 66% of total compensation represents salary and 34% is other remuneration. It's interesting to note that Threat Protect Australia pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Threat Protect Australia Limited's Growth

Over the last three years, Threat Protect Australia Limited has shrunk its earnings per share by 93% per year. Its revenue is up 40% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Threat Protect Australia Limited Been A Good Investment?

Since shareholders would have lost about 76% over three years, some Threat Protect Australia Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Threat Protect Australia pays its CEO in line with similar-sized companies belonging to the same industry. But revenue growth seems to be inching northward, a heartening sign for the company. On the other hand, shareholder returns for Demetrios are negative over the same period. EPS growth is bleak as well, adding fuel to the fire. We'd say CEO compensation isn't unfair, but shareholders may be wary of a bump in pay before the company substantially improves overall performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 4 warning signs for Threat Protect Australia that you should be aware of before investing.

Important note: Threat Protect Australia is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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