Carly Holdings Limited's (ASX:CL8) CEO Compensation Looks Acceptable To Us And Here's Why

The performance at Carly Holdings Limited (ASX:CL8) has been rather lacklustre of late and shareholders may be wondering what CEO Chris Noone is planning to do about this. At the next AGM coming up on 18 November 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Carly Holdings

How Does Total Compensation For Chris Noone Compare With Other Companies In The Industry?

Our data indicates that Carly Holdings Limited has a market capitalization of AU$5.7m, and total annual CEO compensation was reported as AU$362k for the year to June 2021. Notably, that's an increase of 48% over the year before. Notably, the salary which is AU$225.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$272m, reported a median total CEO compensation of AU$530k. Accordingly, Carly Holdings pays its CEO under the industry median.

Component	2021	2020	Proportion (2021)
Salary	AU$225k	AU$216k	62%
Other	AU$137k	AU$28k	38%
Total Compensation	AU$362k	AU$244k	100%

Talking in terms of the industry, salary represented approximately 48% of total compensation out of all the companies we analyzed, while other remuneration made up 52% of the pie. According to our research, Carly Holdings has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Carly Holdings Limited's Growth

Carly Holdings Limited has seen its earnings per share (EPS) increase by 9.9% a year over the past three years. Its revenue is down 17% over the previous year.

We would prefer it if there was revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Carly Holdings Limited Been A Good Investment?

Few Carly Holdings Limited shareholders would feel satisfied with the return of -85% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The loss to shareholders over the past three years is certainly concerning. Perhaps the poor price performance may have something to do with the the fact that earnings per share growth has not been performing as strongly either. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for Carly Holdings you should be aware of, and 4 of them shouldn't be ignored.

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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