Tim Bartholomaeus has been the CEO of Tamawood Limited (ASX:TWD) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Tamawood pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Tamawood
How Does Total Compensation For Tim Bartholomaeus Compare With Other Companies In The Industry?
At the time of writing, our data shows that Tamawood Limited has a market capitalization of AU$96m, and reported total annual CEO compensation of AU$267k for the year to June 2020. That's a slightly lower by 5.8% over the previous year. We note that the salary portion, which stands at AU$194.1k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$260m, the reported median total CEO compensation was AU$477k. That is to say, Tim Bartholomaeus is paid under the industry median. What's more, Tim Bartholomaeus holds AU$1.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$194k | AU$194k | 73% |
| Other | AU$72k | AU$89k | 27% |
| Total Compensation | AU$267k | AU$283k | 100% |
On an industry level, around 81% of total compensation represents salary and 19% is other remuneration. In Tamawood's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Tamawood Limited's Growth Numbers
Tamawood Limited has reduced its earnings per share by 23% a year over the last three years. In the last year, its revenue is down 11%.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Tamawood Limited Been A Good Investment?
Tamawood Limited has not done too badly by shareholders, with a total return of 0.2%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
As previously discussed, Tim is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been unexciting, and EPS growth has fared even worse. So, although we can't say CEO compensation is very high, shareholders might want to see an improvement in overall performance before agreeing that Tim deserves a bump.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Tamawood you should be aware of, and 1 of them is potentially serious.
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About ASX:TWD
Tamawood
Provides contract home construction, home design, and other associated activities in Australia.
Flawless balance sheet with proven track record.
