How Does Select Harvests' (ASX:SHV) CEO Pay Compare With Company Performance?

Paul Thompson became the CEO of Select Harvests Limited (ASX:SHV) in 2012, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Select Harvests.

See our latest analysis for Select Harvests

Comparing Select Harvests Limited's CEO Compensation With the industry

According to our data, Select Harvests Limited has a market capitalization of AU$633m, and paid its CEO total annual compensation worth AU$992k over the year to September 2020. Notably, that's a decrease of 25% over the year before. In particular, the salary of AU$574.6k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between AU$257m and AU$1.0b had a median total CEO compensation of AU$913k. This suggests that Select Harvests remunerates its CEO largely in line with the industry average. Moreover, Paul Thompson also holds AU$420k worth of Select Harvests stock directly under their own name.

Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. In Select Harvests' 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 Select Harvests Limited's Growth Numbers

Over the past three years, Select Harvests Limited has seen its earnings per share (EPS) grow by 43% per year. Its revenue is down 17% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Select Harvests Limited Been A Good Investment?

Select Harvests Limited has served shareholders reasonably well, with a total return of 22% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we noted earlier, Select Harvests pays its CEO in line with similar-sized companies belonging to the same industry. But EPS growth for the company has been strong over the last three years, though shareholder returns in comparison haven't been as impressive. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.

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. We did our research and spotted 4 warning signs for Select Harvests that investors should look into moving forward.

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. 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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