The CEO of Euroz Limited (ASX:EZL) is Andrew McKenzie, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Euroz
How Does Total Compensation For Andrew McKenzie Compare With Other Companies In The Industry?
Our data indicates that Euroz Limited has a market capitalization of AU$308m, and total annual CEO compensation was reported as AU$766k for the year to June 2020. We note that's an increase of 11% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$246k.
On comparing similar companies from the same industry with market caps ranging from AU$130m to AU$520m, we found that the median CEO total compensation was AU$720k. From this we gather that Andrew McKenzie is paid around the median for CEOs in the industry. Moreover, Andrew McKenzie also holds AU$21m worth of Euroz 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$246k | AU$243k | 32% |
| Other | AU$520k | AU$448k | 68% |
| Total Compensation | AU$766k | AU$692k | 100% |
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Euroz pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Euroz Limited's Growth
Over the last three years, Euroz Limited has shrunk its earnings per share by 51% per year. The trailing twelve months of revenue was pretty much the same as the prior period.
Overall this is not a very positive result for shareholders. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Euroz Limited Been A Good Investment?
Boasting a total shareholder return of 67% over three years, Euroz Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
As we touched on above, Euroz Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This isn't great when you look at it against the backdrop of EPS growth, which has been negative for the past three years. But on the bright side, shareholder returns have moved northward during the same period. We're not saying CEO compensation is too generous, but shareholders will probably want to see an increase in EPS before agreeing the business should pay any more.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 4 warning signs for Euroz that investors should think about before committing capital to this stock.
Important note: Euroz is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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Access Free AnalysisThis 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:EZL
Euroz Hartleys Group
A diversified financial services company, provides stockbroking, corporate finance, funds management, investment advice, financial advisory, and wealth management services to private, institutional, and corporate clients in Australia.
Flawless balance sheet moderate.
