We Take A Look At Why Sunland Group Limited's (ASX:SDG) CEO Compensation Is Well Earned

It would be hard to discount the role that CEO Sahba Abedian has played in delivering the impressive results at Sunland Group Limited (ASX:SDG) recently. Coming up to the next AGM on 15 November 2022, shareholders would be keeping this in mind. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for Sunland Group

How Does Total Compensation For Sahba Abedian Compare With Other Companies In The Industry?

At the time of writing, our data shows that Sunland Group Limited has a market capitalization of AU$329m, and reported total annual CEO compensation of AU$939k for the year to June 2022. That's a notable increase of 17% on last year. Notably, the salary which is AU$915.4k, represents most of the total compensation being paid.

For comparison, other companies in the same industry with market capitalizations ranging between AU$155m and AU$619m had a median total CEO compensation of AU$999k. So it looks like Sunland Group compensates Sahba Abedian in line with the median for the industry. Furthermore, Sahba Abedian directly owns AU$22m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	AU$915k	AU$784k	97%
Other	AU$24k	AU$22k	3%
Total Compensation	AU$939k	AU$805k	100%

On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. Sunland Group has gone down a largely traditional route, paying Sahba Abedian a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Sunland Group Limited's Growth

Sunland Group Limited's earnings per share (EPS) grew 80% per year over the last three years. It achieved revenue growth of 101% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Sunland Group Limited Been A Good Investment?

Boasting a total shareholder return of 156% over three years, Sunland 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...

Sunland Group pays its CEO a majority of compensation through a salary. Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Sunland Group that investors should think about before committing capital to this stock.

Important note: Sunland Group 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.