This article will reflect on the compensation paid to Mark Alexander Norwell who has served as CEO of Perenti Global Limited (ASX:PRN) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Perenti Global.
Check out our latest analysis for Perenti Global
How Does Total Compensation For Mark Alexander Norwell Compare With Other Companies In The Industry?
At the time of writing, our data shows that Perenti Global Limited has a market capitalization of AU$803m, and reported total annual CEO compensation of AU$1.7m for the year to June 2020. Notably, that's an increase of 8.7% over the year before. We note that the salary portion, which stands at AU$870.1k constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between AU$518m and AU$2.1b, we discovered that the median CEO total compensation of that group was AU$1.1m. Hence, we can conclude that Mark Alexander Norwell is remunerated higher than the industry median. Moreover, Mark Alexander Norwell also holds AU$185k worth of Perenti Global stock directly under their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$870k | AU$610k | 51% |
| Other | AU$851k | AU$973k | 49% |
| Total Compensation | AU$1.7m | AU$1.6m | 100% |
Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. Perenti Global sets aside a smaller share of compensation for salary, in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Perenti Global Limited's Growth
Over the last three years, Perenti Global Limited has shrunk its earnings per share by 80% per year. It achieved revenue growth of 3.7% over the last year.
The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Perenti Global Limited Been A Good Investment?
With a three year total loss of 44% for the shareholders, Perenti Global Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As previously discussed, Mark Alexander is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.
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 Perenti Global (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the 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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About ASX:PRN
Flawless balance sheet established dividend payer.
