Stock Analysis

Corporate Travel Management Limited's (ASX:CTD) CEO Will Probably Find It Hard To See A Huge Raise This Year

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Key Insights

In the past three years, the share price of Corporate Travel Management Limited (ASX:CTD) has struggled to generate growth for its shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 25th of October. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Corporate Travel Management

Comparing Corporate Travel Management Limited's CEO Compensation With The Industry

Our data indicates that Corporate Travel Management Limited has a market capitalization of AU$2.5b, and total annual CEO compensation was reported as AU$1.0m for the year to June 2023. We note that's an increase of 12% above last year. We note that the salary of AU$595.1k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the Australian Hospitality industry with market capitalizations ranging from AU$1.6b to AU$5.0b, the reported median CEO total compensation was AU$1.2m. From this we gather that Jamie Pherous is paid around the median for CEOs in the industry. What's more, Jamie Pherous holds AU$294m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20232022Proportion (2023)
Salary AU$595k AU$472k 59%
Other AU$422k AU$434k 41%
Total CompensationAU$1.0m AU$906k100%

Talking in terms of the industry, salary represented approximately 57% of total compensation out of all the companies we analyzed, while other remuneration made up 43% of the pie. Although there is a difference in how total compensation is set, Corporate Travel Management more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ASX:CTD CEO Compensation October 18th 2023

Corporate Travel Management Limited's Growth

Over the past three years, Corporate Travel Management Limited has seen its earnings per share (EPS) grow by 98% per year. It achieved revenue growth of 73% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Corporate Travel Management Limited Been A Good Investment?

With a three year total loss of 4.5% for the shareholders, Corporate Travel Management Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

Shareholders may want to check for free if Corporate Travel Management insiders are buying or selling shares.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Corporate Travel Management is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.