The CEO of Uscom Limited (ASX:UCM) is Rob Phillips, and this article examines 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 Uscom.
View our latest analysis for Uscom
Comparing Uscom Limited's CEO Compensation With the industry
Our data indicates that Uscom Limited has a market capitalization of AU$26m, and total annual CEO compensation was reported as AU$352k for the year to June 2020. Notably, that's an increase of 33% over the year before. In particular, the salary of AU$265.8k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below AU$272m, reported a median total CEO compensation of AU$601k. That is to say, Rob Phillips is paid under the industry median. What's more, Rob Phillips holds AU$4.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$266k | AU$240k | 75% |
| Other | AU$87k | AU$25k | 25% |
| Total Compensation | AU$352k | AU$265k | 100% |
On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. Uscom 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 Uscom Limited's Growth Numbers
Over the past three years, Uscom Limited has seen its earnings per share (EPS) grow by 14% per year. Its revenue is up 18% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Uscom Limited Been A Good Investment?
With a total shareholder return of 6.7% over three years, Uscom Limited has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
As we touched on above, Uscom Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS growth has been rock solid for the past three years. Shareholder returns, in comparison, have not been as impressive. Shareholder returns could be better but we're pleased with the positive EPS growth. As a result of these considerations, CEO compensation seems quite appropriate.
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. That's why we did our research, and identified 4 warning signs for Uscom (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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About ASX:UCM
Uscom
Designs, develops, manufactures, and markets non-invasive cardiovascular and pulmonary medical devices in Australia, Asia, the Americas, and Europe.
Flawless balance sheet moderate.
