This article will reflect on the compensation paid to Marty Switzer who has served as CEO of Contango Asset Management Limited (ASX:CGA) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Contango Asset Management.
View our latest analysis for Contango Asset Management
How Does Total Compensation For Marty Switzer Compare With Other Companies In The Industry?
Our data indicates that Contango Asset Management Limited has a market capitalization of AU$40m, and total annual CEO compensation was reported as AU$448k for the year to June 2020. That's a slight decrease of 3.2% on the prior year. Notably, the salary which is AU$412.5k, represents most of the total compensation being paid.
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. So it looks like Contango Asset Management compensates Marty Switzer in line with the median for the industry. Furthermore, Marty Switzer directly owns AU$711k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$412k | AU$440k | 92% |
| Other | AU$35k | AU$22k | 8% |
| Total Compensation | AU$448k | AU$462k | 100% |
On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. Contango Asset Management is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Contango Asset Management Limited's Growth Numbers
Contango Asset Management Limited's earnings per share (EPS) grew 68% per year over the last three years. In the last year, its revenue is up 48%.
Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Contango Asset Management Limited Been A Good Investment?
We think that the total shareholder return of 81%, over three years, would leave most Contango Asset Management Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
As we noted earlier, Contango Asset Management pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Contango Asset Management that investors should be aware of in a dynamic business environment.
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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Excellent balance sheet slight.
