Here's What We Think About Carbonxt Group's (ASX:CG1) CEO Pay

The CEO of Carbonxt Group Limited (ASX:CG1) is Warren Murphy, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Carbonxt Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Carbonxt Group

Comparing Carbonxt Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that Carbonxt Group Limited has a market capitalization of AU$23m, and reported total annual CEO compensation of AU$226k for the year to June 2020. That's a fairly small increase of 3.2% over the previous year. Notably, the salary which is AU$189.7k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$260m, the reported median total CEO compensation was AU$353k. This suggests that Warren Murphy is paid below the industry median. What's more, Warren Murphy holds AU$69k worth of shares in the company in their own name.

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. According to our research, Carbonxt Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Carbonxt Group Limited's Growth Numbers

Over the past three years, Carbonxt Group Limited has seen its earnings per share (EPS) grow by 23% per year. In the last year, its revenue is down 14%.

Shareholders would be glad to know that the company has improved itself over the last few 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 Carbonxt Group Limited Been A Good Investment?

Since shareholders would have lost about 74% over three years, some Carbonxt Group Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Carbonxt Group Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However we must not forget that the EPS growth has been very strong over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Carbonxt Group you should be aware of, and 1 of them is potentially serious.

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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