What Can We Conclude About Clover's (ASX:CLV) CEO Pay?

Peter Davey became the CEO of Clover Corporation Limited (ASX:CLV) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Clover

Comparing Clover Corporation Limited's CEO Compensation With the industry

According to our data, Clover Corporation Limited has a market capitalization of AU$244m, and paid its CEO total annual compensation worth AU$952k over the year to July 2020. That's a notable decrease of 43% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$441k.

In comparison with other companies in the industry with market capitalizations ranging from AU$130m to AU$518m, the reported median CEO total compensation was AU$484k. Hence, we can conclude that Peter Davey is remunerated higher than the industry median. Moreover, Peter Davey also holds AU$658k worth of Clover stock directly under their own name.

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. In Clover's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Clover Corporation Limited's Growth Numbers

Over the past three years, Clover Corporation Limited has seen its earnings per share (EPS) grow by 50% per year. It achieved revenue growth of 15% 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Clover Corporation Limited Been A Good Investment?

We think that the total shareholder return of 130%, over three years, would leave most Clover Corporation Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we noted earlier, Clover pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, Clover has produced strong EPS growth and shareholder returns over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Peter deserves a raise!

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Clover that investors should think about before committing capital to this stock.

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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