Is Cellmid Limited's (ASX:CDY) CEO Paid Enough Relative To Peers?

Maria Halasz has been the CEO of Cellmid Limited (ASX:CDY) since 2007. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Cellmid

How Does Maria Halasz's Compensation Compare With Similar Sized Companies?

According to our data, Cellmid Limited has a market capitalization of AU$23m, and pays its CEO total annual compensation worth AU$474k. (This is based on the year to 2018). That's a notable increase of 13% on last year. We think total compensation is more important but we note that the CEO salary is lower, at AU$429k. We took a group of companies with market capitalizations below AU$278m, and calculated the median CEO compensation to be AU$365k.

Thus we can conclude that Maria Halasz receives more in total compensation than the median of a group of companies in the same market, and of similar size to Cellmid Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. Take a look at Cellmid's profit growth by viewing this freedata-rich visualization of earnings, revenue and cash flow.

You can see, below, how CEO compensation at Cellmid has changed over time.

Is Cellmid Limited Growing?

On average over the last three years, Cellmid Limited has grown earnings per share (EPS) by 6.9% each year. In the last year, its revenue is up 23%.

I think the revenue growth is good. And, while modest, the earnings per share growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable.

Has Cellmid Limited Been A Good Investment?

Since shareholders would have lost about 43% over three years, some Cellmid Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Cellmid Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. This contrasts with the growth in CEO remuneration, in the last year. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. So you may want to check if insiders are buying Cellmid shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this freelist of interesting companies, that have HIGH return on equity and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.