How Does Tassal Group's (ASX:TGR) CEO Pay Compare With Company Performance?

Mark Ryan has been the CEO of Tassal Group Limited (ASX:TGR) since 2003, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Tassal Group.

Check out our latest analysis for Tassal Group

Comparing Tassal Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that Tassal Group Limited has a market capitalization of AU$714m, and reported total annual CEO compensation of AU$1.3m for the year to June 2020. That's a modest increase of 4.3% on the prior year. Notably, the salary which is AU$738.8k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from AU$260m to AU$1.0b, the reported median CEO total compensation was AU$916k. Accordingly, our analysis reveals that Tassal Group Limited pays Mark Ryan north of the industry median. What's more, Mark Ryan holds AU$795k worth of shares in the company in their own name.

On an industry level, roughly 80% of total compensation represents salary and 20% is other remuneration. It's interesting to note that Tassal Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Tassal Group Limited's Growth Numbers

Over the last three years, Tassal Group Limited has shrunk its earnings per share by 3.0% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Its a bit disappointing to see that the company has failed to grow its EPS. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Tassal Group Limited Been A Good Investment?

Tassal Group Limited has generated a total shareholder return of 3.9% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

As previously discussed, Mark is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, EPS has not grown in three years, failing to impress us. And shareholder returns are decent but not great. So you can understand why we do not think CEO compensation is particularly modest!

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've identified 1 warning sign for Tassal Group that investors should be aware of in a dynamic business environment.

Important note: Tassal Group 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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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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