Most Shareholders Will Probably Find That The CEO Compensation For City Chic Collective Limited (ASX:CCX) Is Reasonable

Under the guidance of CEO Phil Ryan, City Chic Collective Limited (ASX:CCX) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 16 November 2021. Here is our take on why we think the CEO compensation looks appropriate.

View our latest analysis for City Chic Collective

Comparing City Chic Collective Limited's CEO Compensation With the industry

Our data indicates that City Chic Collective Limited has a market capitalization of AU$1.5b, and total annual CEO compensation was reported as AU$1.9m for the year to June 2021. That's just a smallish increase of 4.4% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$700k.

In comparison with other companies in the industry with market capitalizations ranging from AU$543m to AU$2.2b, the reported median CEO total compensation was AU$1.9m. So it looks like City Chic Collective compensates Phil Ryan in line with the median for the industry. What's more, Phil Ryan holds AU$2.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	AU$700k	AU$699k	37%
Other	AU$1.2m	AU$1.1m	63%
Total Compensation	AU$1.9m	AU$1.8m	100%

On an industry level, around 38% of total compensation represents salary and 62% is other remuneration. City Chic Collective is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

City Chic Collective Limited's Growth

City Chic Collective Limited's earnings per share (EPS) grew 4.8% per year over the last three years. Its revenue is up 33% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. And in that context, the modest EPS improvement certainly isn't shabby. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has City Chic Collective Limited Been A Good Investment?

Most shareholders would probably be pleased with City Chic Collective Limited for providing a total return of 455% over three years. 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.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

So you may want to check if insiders are buying City Chic Collective shares with their own money (free access).

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.

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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