This article will reflect on the compensation paid to Tom Tonavanik who has served as CEO of SportsHero Limited (ASX:SHO) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for SportsHero.
See our latest analysis for SportsHero
How Does Total Compensation For Tom Tonavanik Compare With Other Companies In The Industry?
At the time of writing, our data shows that SportsHero Limited has a market capitalization of AU$13m, and reported total annual CEO compensation of US$112k for the year to June 2020. That's a notable decrease of 17% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$112k.
For comparison, other companies in the industry with market capitalizations below AU$261m, reported a median total CEO compensation of US$107k. From this we gather that Tom Tonavanik is paid around the median for CEOs in the industry. Furthermore, Tom Tonavanik directly owns AU$330k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | US$112k | US$107k | 100% |
| Other | - | US$29k | - |
| Total Compensation | US$112k | US$136k | 100% |
On an industry level, roughly 90% of total compensation represents salary and 10% is other remuneration. Speaking on a company level, SportsHero prefers to tread along a traditional path, disbursing all compensation through a salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at SportsHero Limited's Growth Numbers
Over the past three years, SportsHero Limited has seen its earnings per share (EPS) grow by 61% per year. It saw its revenue drop 89% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 SportsHero Limited Been A Good Investment?
With a three year total loss of 84% for the shareholders, SportsHero Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
SportsHero pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we touched on above, SportsHero Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for SportsHero you should be aware of, and 3 of them are significant.
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:SHO
SportsHero
Owns and operates sport prediction, gamification, and marketing platforms in Australia, Singapore, and Indonesia.
Moderate with imperfect balance sheet.
