Rhinomed Limited's (ASX:RNO) CEO Will Probably Find It Hard To See A Huge Raise This Year

Key Insights

• Rhinomed's Annual General Meeting to take place on 16th of November
• Salary of AU$371.0k is part of CEO Michael Johnson's total remuneration
• The overall pay is comparable to the industry average
• Rhinomed's EPS grew by 14% over the past three years while total shareholder loss over the past three years was 83%

Shareholders of Rhinomed Limited (ASX:RNO) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 16th of November. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Rhinomed

How Does Total Compensation For Michael Johnson Compare With Other Companies In The Industry?

According to our data, Rhinomed Limited has a market capitalization of AU$8.6m, and paid its CEO total annual compensation worth AU$532k over the year to June 2023. Notably, that's an increase of 44% over the year before. In particular, the salary of AU$371.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Australian Pharmaceuticals industry with market capitalizations below AU$315m, reported a median total CEO compensation of AU$680k. From this we gather that Michael Johnson is paid around the median for CEOs in the industry.

Component	2023	2022	Proportion (2023)
Salary	AU$371k	AU$301k	70%
Other	AU$161k	AU$68k	30%
Total Compensation	AU$532k	AU$369k	100%

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. According to our research, Rhinomed has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Rhinomed Limited's Growth

Over the past three years, Rhinomed Limited has seen its earnings per share (EPS) grow by 14% per year. In the last year, its revenue is down 16%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in 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 Rhinomed Limited Been A Good Investment?

With a total shareholder return of -83% over three years, Rhinomed Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 5 warning signs for Rhinomed that investors should think about before committing capital to this stock.

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