Shareholders May Be More Conservative With Prime Financial Group Limited's (ASX:PFG) CEO Compensation For Now

Key Insights

• Prime Financial Group will host its Annual General Meeting on 29th of November
• CEO Simon Madder's total compensation includes salary of AU$471.3k
• The overall pay is 118% above the industry average
• Prime Financial Group's total shareholder return over the past three years was 176% while its EPS grew by 21% over the past three years

Performance at Prime Financial Group Limited (ASX:PFG) has been reasonably good and CEO Simon Madder has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 29th of November, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Prime Financial Group

How Does Total Compensation For Simon Madder Compare With Other Companies In The Industry?

At the time of writing, our data shows that Prime Financial Group Limited has a market capitalization of AU$45m, and reported total annual CEO compensation of AU$1.0m for the year to June 2023. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$471k.

For comparison, other companies in the Australian Capital Markets industry with market capitalizations below AU$306m, reported a median total CEO compensation of AU$476k. Accordingly, our analysis reveals that Prime Financial Group Limited pays Simon Madder north of the industry median. Moreover, Simon Madder also holds AU$6.4m worth of Prime Financial Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$471k	AU$471k	45%
Other	AU$568k	AU$553k	55%
Total Compensation	AU$1.0m	AU$1.0m	100%

On an industry level, around 65% of total compensation represents salary and 35% is other remuneration. In Prime Financial Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Prime Financial Group Limited's Growth

Prime Financial Group Limited's earnings per share (EPS) grew 21% per year over the last three years. In the last year, its revenue is up 28%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Prime Financial Group Limited Been A Good Investment?

Boasting a total shareholder return of 176% over three years, Prime Financial Group Limited has done well by shareholders. 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.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for Prime Financial Group that investors should be aware of in a dynamic business environment.

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. 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.