Increases to CEO Compensation Might Be Put On Hold For Now at Zeotech Limited (ASX:ZEO)

CEO Peter Zardo has done a decent job of delivering relatively good performance at Zeotech Limited (ASX:ZEO) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28 November 2022. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Zeotech

How Does Total Compensation For Peter Zardo Compare With Other Companies In The Industry?

At the time of writing, our data shows that Zeotech Limited has a market capitalization of AU$61m, and reported total annual CEO compensation of AU$827k for the year to June 2022. That's a notable decrease of 24% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$261k.

In comparison with other companies in the industry with market capitalizations under AU$299m, the reported median total CEO compensation was AU$359k. Accordingly, our analysis reveals that Zeotech Limited pays Peter Zardo north of the industry median. Moreover, Peter Zardo also holds AU$1.6m worth of Zeotech stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	AU$261k	AU$228k	32%
Other	AU$566k	AU$860k	68%
Total Compensation	AU$827k	AU$1.1m	100%

On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. It's interesting to note that Zeotech allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Zeotech Limited's Growth Numbers

Over the last three years, Zeotech Limited has shrunk its earnings per share by 18% per year. Its revenue is up 262% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Zeotech Limited Been A Good Investment?

Boasting a total shareholder return of 217% over three years, Zeotech Limited has done well by shareholders. 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...

The overall company performance has been commendable, however there are still areas for improvement. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for Zeotech you should be aware of, and 3 of them shouldn't be ignored.

Important note: Zeotech 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.