Angus G. Benbow has been the CEO of Centrepoint Alliance Limited (ASX:CAF) since 2018, 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 Centrepoint Alliance.
Check out our latest analysis for Centrepoint Alliance
Comparing Centrepoint Alliance Limited's CEO Compensation With the industry
According to our data, Centrepoint Alliance Limited has a market capitalization of AU$32m, and paid its CEO total annual compensation worth AU$701k over the year to June 2020. We note that's a decrease of 10% compared to last year. In particular, the salary of AU$430.2k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$265m, we found that the median total CEO compensation was AU$444k. Hence, we can conclude that Angus G. Benbow is remunerated higher than the industry median. Moreover, Angus G. Benbow also holds AU$264k worth of Centrepoint Alliance stock directly under their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$430k | AU$454k | 61% |
| Other | AU$271k | AU$326k | 39% |
| Total Compensation | AU$701k | AU$780k | 100% |
Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. Centrepoint Alliance sets aside a smaller share of compensation for salary, in comparison to the overall industry. 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 Centrepoint Alliance Limited's Growth Numbers
Centrepoint Alliance Limited has reduced its earnings per share by 19% a year over the last three years. It achieved revenue growth of 11% over the last year.
Overall this is not a very positive result for shareholders. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Centrepoint Alliance Limited Been A Good Investment?
With a three year total loss of 55% for the shareholders, Centrepoint Alliance Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we touched on above, Centrepoint Alliance Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Disappointingly, share price gains over the last three years have failed to materialize. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Centrepoint Alliance you should be aware of, and 1 of them is a bit unpleasant.
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.
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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:CAF
Solid track record with excellent balance sheet and pays a dividend.
