Stock Analysis

Most Shareholders Will Probably Agree With Dimerix Limited's (ASX:DXB) CEO Compensation

ASX:DXB
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CEO Nina Webster has done a decent job of delivering relatively good performance at Dimerix Limited (ASX:DXB) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27 September 2021. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for Dimerix

Comparing Dimerix Limited's CEO Compensation With the industry

Our data indicates that Dimerix Limited has a market capitalization of AU$68m, and total annual CEO compensation was reported as AU$408k for the year to June 2021. We note that's a decrease of 24% compared to last year. Notably, the salary which is AU$334.3k, 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$452k. So it looks like Dimerix compensates Nina Webster in line with the median for the industry.

Component20212020Proportion (2021)
Salary AU$334k AU$304k 82%
Other AU$74k AU$235k 18%
Total CompensationAU$408k AU$539k100%

Speaking on an industry level, nearly 57% of total compensation represents salary, while the remainder of 43% is other remuneration. Dimerix is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ASX:DXB CEO Compensation September 20th 2021

Dimerix Limited's Growth

Over the last three years, Dimerix Limited has shrunk its earnings per share by 11% per year. Its revenue is up 90% over the last year.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Dimerix Limited Been A Good Investment?

We think that the total shareholder return of 162%, over three years, would leave most Dimerix Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Although the company has performed relatively well, we still think there are some areas that could be improved. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 6 warning signs for Dimerix (2 make us uncomfortable!) that you should be aware of before investing here.

Important note: Dimerix 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.
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