Richard Rees became the CEO of Sietel Limited (ASX:SSL) in 1981. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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.
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How Does Richard Rees’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Sietel Limited has a market cap of AU$48m, and is paying total annual CEO compensation of AU$315k. (This figure is for the year to September 2018). While we always look at total compensation first, we note that the salary component is less, at AU$250k. We examined a group of similar sized companies, with market capitalizations of below AU$289m. The median CEO total compensation in that group is AU$353k.
So Richard Rees receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Sietel has changed over time.
Is Sietel Limited Growing?
Sietel Limited has increased its earnings per share (EPS) by an average of 44% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 4.1%.
This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Sietel Limited Been A Good Investment?
Most shareholders would probably be pleased with Sietel Limited for providing a total return of 39% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Richard Rees is paid around what is normal the leaders of comparable size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Sietel.
If you want to buy a stock that is better than Sietel, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.