Key Things To Understand About Eumundi Group's (ASX:EBG) CEO Pay Cheque

Suzanne Jacobi-Lee has been the CEO of Eumundi Group Limited (ASX:EBG) since 2013, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Eumundi Group.

View our latest analysis for Eumundi Group

Comparing Eumundi Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that Eumundi Group Limited has a market capitalization of AU$39m, and reported total annual CEO compensation of AU$237k for 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$189.2k 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$558k. Accordingly, Eumundi Group pays its CEO under the industry median.

On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. Although there is a difference in how total compensation is set, Eumundi Group more or less reflects the market in terms of setting the salary. 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.

A Look at Eumundi Group Limited's Growth Numbers

Over the last three years, Eumundi Group Limited has shrunk its earnings per share by 30% per year. In the last year, its revenue is down 17%.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation 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 Eumundi Group Limited Been A Good Investment?

Eumundi Group Limited has served shareholders reasonably well, with a total return of 16% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we noted earlier, Eumundi Group pays its CEO lower than the norm for similar-sized companies belonging 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 Suzanne 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. We identified 4 warning signs for Eumundi Group (2 can't be ignored!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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