Shareholders Will Likely Find Carbonxt Group Limited's (ASX:CG1) CEO Compensation Acceptable

Key Insights

• Carbonxt Group will host its Annual General Meeting on 27th of November
• Salary of AU$219.0k is part of CEO Warren Murphy's total remuneration
• The overall pay is 40% below the industry average
• Carbonxt Group's EPS grew by 25% over the past three years while total shareholder loss over the past three years was 62%

The performance at Carbonxt Group Limited (ASX:CG1) has been rather lacklustre of late and shareholders may be wondering what CEO Warren Murphy is planning to do about this. At the next AGM coming up on 27th of November, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

View our latest analysis for Carbonxt Group

How Does Total Compensation For Warren Murphy Compare With Other Companies In The Industry?

According to our data, Carbonxt Group Limited has a market capitalization of AU$19m, and paid its CEO total annual compensation worth AU$219k over the year to June 2023. There was no change in the compensation compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth AU$219k.

In comparison with other companies in the Australian Chemicals industry with market capitalizations under AU$305m, the reported median total CEO compensation was AU$368k. This suggests that Warren Murphy is paid below the industry median. Furthermore, Warren Murphy directly owns AU$96k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$219k	AU$219k	100%
Other	-	-	-
Total Compensation	AU$219k	AU$219k	100%

Talking in terms of the industry, salary represented approximately 82% of total compensation out of all the companies we analyzed, while other remuneration made up 18% of the pie. On a company level, Carbonxt Group prefers to reward its CEO through a salary, opting not to pay Warren Murphy through non-salary benefits. 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

Carbonxt Group Limited's earnings per share (EPS) grew 25% per year over the last three years. In the last year, its revenue is down 16%.

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?

The return of -62% over three years would not have pleased Carbonxt Group Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Carbonxt Group rewards its CEO solely through a salary, ignoring non-salary benefits completely. The fact that shareholders are sitting on a loss is certainly disheartening. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key question may be why the fundamentals have not yet been reflected into the share price. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Carbonxt Group that investors should think about before committing capital to this stock.

Important note: Carbonxt 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. 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.