Respiri Limited's (ASX:RSH) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Respiri's Annual General Meeting to take place on 15th of November
• Salary of AU$428.3k is part of CEO Marjan Mikel's total remuneration
• Total compensation is similar to the industry average
• Over the past three years, Respiri's EPS grew by 30% and over the past three years, the total loss to shareholders 86%

The underwhelming share price performance of Respiri Limited (ASX:RSH) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 15th of November. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Respiri

How Does Total Compensation For Marjan Mikel Compare With Other Companies In The Industry?

Our data indicates that Respiri Limited has a market capitalization of AU$23m, and total annual CEO compensation was reported as AU$570k for the year to June 2023. We note that's a small decrease of 6.2% on last year. We note that the salary portion, which stands at AU$428.3k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Australian Medical Equipment industry with market capitalizations below AU$311m, reported a median total CEO compensation of AU$493k. This suggests that Respiri remunerates its CEO largely in line with the industry average. Moreover, Marjan Mikel also holds AU$105k worth of Respiri stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	AU$428k	AU$428k	75%
Other	AU$142k	AU$179k	25%
Total Compensation	AU$570k	AU$607k	100%

Speaking on an industry level, nearly 62% of total compensation represents salary, while the remainder of 38% is other remuneration. Respiri pays out 75% of remuneration in the form of a salary, significantly higher than the industry average. 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 Respiri Limited's Growth Numbers

Over the past three years, Respiri Limited has seen its earnings per share (EPS) grow by 30% per year. In the last year, its revenue is down 15%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Respiri Limited Been A Good Investment?

With a total shareholder return of -86% over three years, Respiri Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 6 warning signs (and 2 which are significant) in Respiri we think you should know about.

Switching gears from Respiri, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.