Stock Analysis

We Discuss Why Navigator Global Investments Limited's (ASX:NGI) CEO Compensation May Be Closely Reviewed

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Navigator Global Investments Limited (ASX:NGI) has not performed well recently and CEO Sean McGould will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 16 November 2022. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

Check out the opportunities and risks within the AU Capital Markets industry.

Comparing Navigator Global Investments Limited's CEO Compensation With The Industry

According to our data, Navigator Global Investments Limited has a market capitalization of AU$276m, and paid its CEO total annual compensation worth US$1.1m over the year to June 2022. That's a notable decrease of 26% on last year. We note that the salary portion, which stands at US$689.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between AU$155m and AU$620m had a median total CEO compensation of US$700k. This suggests that Sean McGould is paid more than the median for the industry. Moreover, Sean McGould also holds AU$23m worth of Navigator Global Investments stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20222021Proportion (2022)
Salary US$689k US$1.0m 65%
Other US$373k US$440k 35%
Total CompensationUS$1.1m US$1.4m100%

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. According to our research, Navigator Global Investments has allocated a higher percentage of pay to salary in comparison to the wider 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.

ASX:NGI CEO Compensation November 10th 2022

A Look at Navigator Global Investments Limited's Growth Numbers

Navigator Global Investments Limited saw earnings per share stay pretty flat over the last three years. Its revenue is down 5.6% over the previous year.

A lack of EPS improvement is not good to see. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Navigator Global Investments Limited Been A Good Investment?

Few Navigator Global Investments Limited shareholders would feel satisfied with the return of -45% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 3 warning signs for Navigator Global Investments that you should be aware of before investing.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Navigator Global Investments is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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