Here's What We Learned About The CEO Pay At Buddy Technologies Limited (ASX:BUD)

David McLauchlan is the CEO of Buddy Technologies Limited (ASX:BUD), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Buddy Technologies pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Buddy Technologies

Comparing Buddy Technologies Limited's CEO Compensation With the industry

According to our data, Buddy Technologies Limited has a market capitalization of AU$150m, and paid its CEO total annual compensation worth AU$325k over the year to June 2020. We note that's a small decrease of 7.0% on last year. Notably, the salary of AU$325k is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under AU$259m, the reported median total CEO compensation was AU$553k. This suggests that David McLauchlan is paid below the industry median. Furthermore, David McLauchlan directly owns AU$6.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 81% of total compensation represents salary, while the remainder of 19% is other remuneration. At the company level, Buddy Technologies pays David McLauchlan solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Buddy Technologies Limited's Growth

Earnings per share at Buddy Technologies Limited are much the same as they were three years ago, albeit slightly lower. It achieved revenue growth of 244% over the last year.

The reduction in EPS, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one 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 Buddy Technologies Limited Been A Good Investment?

With a three year total loss of 70% for the shareholders, Buddy Technologies Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Buddy Technologies rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, Buddy Technologies Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But poor shareholder returns EPS growth have hampered the company over the past three years. On the flip side, recent revenue growth has been positive. Though we believe David is modestly compensated, shareholders might want to see positive shareholder returns before agreeing compensation should be raised.

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 3 warning signs for Buddy Technologies (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Buddy Technologies, 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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