Shareholders May Not Be So Generous With Contango Asset Management Limited's (ASX:CGA) CEO Compensation And Here's Why

CEO Marty Switzer has done a decent job of delivering relatively good performance at Contango Asset Management Limited (ASX:CGA) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 11 November 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Contango Asset Management

How Does Total Compensation For Marty Switzer Compare With Other Companies In The Industry?

At the time of writing, our data shows that Contango Asset Management Limited has a market capitalization of AU$46m, and reported total annual CEO compensation of AU$584k for the year to June 2021. That's a notable increase of 30% on last year. In particular, the salary of AU$384.5k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$269m, reported a median total CEO compensation of AU$436k. This suggests that Marty Switzer is paid more than the median for the industry. Moreover, Marty Switzer also holds AU$785k worth of Contango Asset Management stock directly under their own name.

Component	2021	2020	Proportion (2021)
Salary	AU$385k	AU$412k	66%
Other	AU$200k	AU$35k	34%
Total Compensation	AU$584k	AU$448k	100%

On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. Contango Asset Management pays out 66% of remuneration in the form of a salary, significantly higher than the industry average. 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 Contango Asset Management Limited's Growth Numbers

Contango Asset Management Limited has reduced its earnings per share by 62% a year over the last three years. In the last year, its revenue is up 19%.

The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Contango Asset Management Limited Been A Good Investment?

Boasting a total shareholder return of 74% over three years, Contango Asset Management Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Contango Asset Management that investors should think about before committing capital to this stock.

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.

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.

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