Does Analytica's (ASX:ALT) CEO Salary Compare Well With The Performance Of The Company?

Geoff Daly has been the CEO of Analytica Limited (ASX:ALT) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Analytica pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Analytica

Comparing Analytica Limited's CEO Compensation With the industry

According to our data, Analytica Limited has a market capitalization of AU$11m, and paid its CEO total annual compensation worth AU$283k over the year to June 2020. That's a fairly small increase of 3.3% over the previous year. Notably, the salary which is AU$258.3k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$264m, the reported median total CEO compensation was AU$569k. That is to say, Geoff Daly is paid under the industry median.

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. According to our research, Analytica 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.

A Look at Analytica Limited's Growth Numbers

Analytica Limited's earnings per share (EPS) grew 51% per year over the last three years. It saw its revenue drop 1.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Analytica Limited Been A Good Investment?

Since shareholders would have lost about 50% over three years, some Analytica Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Analytica Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, the company has impressed with its EPS growth over three years. Considering EPS are on the up, we would say Geoff is compensated fairly. But we believe shareholders would want to see healthier returns before the CEO gets a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 3 which are a bit unpleasant) in Analytica we think you should know about.

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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