There Could Be A Chance Desane Group Holdings Limited's (ASX:DGH) CEO Will Have Their Compensation Increased

Shareholders will probably not be disappointed by the robust results at Desane Group Holdings Limited (ASX:DGH) recently and they will be keeping this in mind as they go into the AGM on 28 October 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

See our latest analysis for Desane Group Holdings

How Does Total Compensation For Felice Montrone Compare With Other Companies In The Industry?

According to our data, Desane Group Holdings Limited has a market capitalization of AU$49m, and paid its CEO total annual compensation worth AU$222k over the year to June 2021. We note that's a decrease of 45% compared to last year. We note that the salary portion, which stands at AU$203.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below AU$267m, reported a median total CEO compensation of AU$510k. This suggests that Felice Montrone is paid below the industry median. Moreover, Felice Montrone also holds AU$17m worth of Desane Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	AU$203k	AU$368k	91%
Other	AU$19k	AU$35k	9%
Total Compensation	AU$222k	AU$403k	100%

On an industry level, roughly 73% of total compensation represents salary and 27% is other remuneration. Desane Group Holdings pays out 91% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Desane Group Holdings Limited's Growth Numbers

Over the past three years, Desane Group Holdings Limited has seen its earnings per share (EPS) grow by 35% per year. In the last year, its revenue is up 40%.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Desane Group Holdings Limited Been A Good Investment?

Desane Group Holdings Limited has not done too badly by shareholders, with a total return of 1.3%, over three years. It would be nice to see that metric improve in the future. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

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. That's why we did our research, and identified 6 warning signs for Desane Group Holdings (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Desane Group Holdings, 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.

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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