How Does Tinybeans Group's (ASX:TNY) CEO Pay Compare With Company Performance?

By
Simply Wall St
Published
November 09, 2020
ASX:TNY

Eddie Geller is the CEO of Tinybeans Group Limited (ASX:TNY), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Tinybeans Group.

View our latest analysis for Tinybeans Group

Comparing Tinybeans Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that Tinybeans Group Limited has a market capitalization of AU$63m, and reported total annual CEO compensation of AU$527k for the year to June 2020. That's a fairly small increase of 7.8% over the previous year. Notably, the salary which is AU$386.8k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$275m, reported a median total CEO compensation of AU$327k. This suggests that Eddie Geller is paid more than the median for the industry. Moreover, Eddie Geller also holds AU$8.8m worth of Tinybeans Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary AU$387k AU$364k 73%
Other AU$140k AU$125k 27%
Total CompensationAU$527k AU$489k100%

On an industry level, roughly 73% of total compensation represents salary and 27% is other remuneration. Although there is a difference in how total compensation is set, Tinybeans Group more or less reflects the market in terms of setting the 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.

ceo-compensation
ASX:TNY CEO Compensation November 10th 2020

Tinybeans Group Limited's Growth

Tinybeans Group Limited has seen its earnings per share (EPS) increase by 15% a year over the past three years. Its revenue is up 54% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Tinybeans Group Limited Been A Good Investment?

Boasting a total shareholder return of 119% over three years, Tinybeans Group 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...

As we noted earlier, Tinybeans Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But EPS growth and shareholder returns have been top-notch for the past three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Eddie's performance creates value for the company.

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. We did our research and identified 6 warning signs (and 1 which can't be ignored) in Tinybeans Group we think you should know about.

Switching gears from Tinybeans Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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