Here's Why It's Unlikely That SEEK Limited's (ASX:SEK) CEO Will See A Pay Rise This Year

Key Insights

• SEEK to hold its Annual General Meeting on 19th of November
• Salary of AU$1.87m is part of CEO Ian Narev's total remuneration
• Total compensation is similar to the industry average
• SEEK's EPS declined by 20% over the past three years while total shareholder loss over the past three years was 27%

Shareholders will probably not be too impressed with the underwhelming results at SEEK Limited (ASX:SEK) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 19th of November. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for SEEK

How Does Total Compensation For Ian Narev Compare With Other Companies In The Industry?

Our data indicates that SEEK Limited has a market capitalization of AU$8.8b, and total annual CEO compensation was reported as AU$4.9m for the year to June 2024. That's a modest increase of 5.3% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.9m.

In comparison with other companies in the Australian Interactive Media and Services industry with market capitalizations ranging from AU$6.1b to AU$18b, the reported median CEO total compensation was AU$5.9m. This suggests that SEEK remunerates its CEO largely in line with the industry average. Furthermore, Ian Narev directly owns AU$11m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	AU$1.9m	AU$1.9m	38%
Other	AU$3.1m	AU$2.8m	62%
Total Compensation	AU$4.9m	AU$4.7m	100%

Talking in terms of the industry, salary represented approximately 55% of total compensation out of all the companies we analyzed, while other remuneration made up 45% of the pie. SEEK sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

SEEK Limited's Growth

Over the last three years, SEEK Limited has shrunk its earnings per share by 20% per year. It saw its revenue drop 6.4% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has SEEK Limited Been A Good Investment?

Since shareholders would have lost about 27% over three years, some SEEK 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...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for SEEK that you should be aware of before investing.

Important note: SEEK 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.