This article will reflect on the compensation paid to Simon Morrison who has served as CEO of Shine Justice Ltd (ASX:SHJ) since 2012. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Shine Justice.
View our latest analysis for Shine Justice
How Does Total Compensation For Simon Morrison Compare With Other Companies In The Industry?
Our data indicates that Shine Justice Ltd has a market capitalization of AU$152m, and total annual CEO compensation was reported as AU$611k for the year to June 2020. We note that's an increase of 9.9% above last year. We note that the salary portion, which stands at AU$489.3k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$263m, reported a median total CEO compensation of AU$499k. So it looks like Shine Justice compensates Simon Morrison in line with the median for the industry. Moreover, Simon Morrison also holds AU$39m worth of Shine Justice stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$489k | AU$489k | 80% |
| Other | AU$122k | AU$67k | 20% |
| Total Compensation | AU$611k | AU$556k | 100% |
On an industry level, roughly 72% of total compensation represents salary and 28% is other remuneration. Shine Justice is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Shine Justice Ltd's Growth Numbers
Over the past three years, Shine Justice Ltd has seen its earnings per share (EPS) grow by 2.1% per year. Its revenue is up 2.8% over the last year.
We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Shine Justice Ltd Been A Good Investment?
Most shareholders would probably be pleased with Shine Justice Ltd for providing a total return of 51% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
As previously discussed, Simon is compensated close to the median for companies of its size, and which belong to the same industry. But the business isn't reporting great numbers in terms of EPS growth. Meanwhile, shareholder returns have remained positive over the same time frame. We would like to see EPS growth from the business, although we wouldn't say the CEO compensation is high.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Shine Justice that investors should look into moving forward.
Switching gears from Shine Justice, 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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About ASX:SHJ
Shine Justice
Through its subsidiaries, provides damages-based plaintiff litigation legal services in Australia and New Zealand.
Excellent balance sheet with proven track record and pays a dividend.
