It's Unlikely That Clean Seas Seafood Limited's (ASX:CSS) CEO Will See A Huge Pay Rise This Year

The underwhelming share price performance of Clean Seas Seafood Limited (ASX:CSS) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 28 October 2022. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out the opportunities and risks within the AU Food industry.

How Does Total Compensation For Rob Gratton Compare With Other Companies In The Industry?

Our data indicates that Clean Seas Seafood Limited has a market capitalization of AU$89m, and total annual CEO compensation was reported as AU$715k for the year to June 2022. Notably, that's an increase of 48% over the year before. In particular, the salary of AU$428.5k, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$316m, reported a median total CEO compensation of AU$361k. Hence, we can conclude that Rob Gratton is remunerated higher than the industry median. Moreover, Rob Gratton also holds AU$244k worth of Clean Seas Seafood stock directly under their own name.

Component	2022	2021	Proportion (2022)
Salary	AU$428k	AU$382k	60%
Other	AU$287k	AU$101k	40%
Total Compensation	AU$715k	AU$483k	100%

On an industry level, around 73% of total compensation represents salary and 27% is other remuneration. In Clean Seas Seafood's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Clean Seas Seafood Limited's Growth Numbers

Clean Seas Seafood Limited has seen its earnings per share (EPS) increase by 45% a year over the past three years. It achieved revenue growth of 37% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Clean Seas Seafood Limited Been A Good Investment?

The return of -36% over three years would not have pleased Clean Seas Seafood Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for Clean Seas Seafood you should be aware of, and 1 of them is concerning.

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. 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.