How Is Supply Network's (ASX:SNL) CEO Paid Relative To Peers?

This article will reflect on the compensation paid to Geoffrey David Stewart who has served as CEO of Supply Network Limited (ASX:SNL) since 1999. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Supply Network.

Check out our latest analysis for Supply Network

How Does Total Compensation For Geoffrey David Stewart Compare With Other Companies In The Industry?

Our data indicates that Supply Network Limited has a market capitalization of AU$233m, and total annual CEO compensation was reported as AU$725k for the year to June 2020. We note that's an increase of 14% above last year. Notably, the salary which is AU$453.5k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from AU$131m to AU$523m, the reported median CEO total compensation was AU$349k. This suggests that Geoffrey David Stewart is paid more than the median for the industry. What's more, Geoffrey David Stewart holds AU$5.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. There isn't a significant difference between Supply Network and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Supply Network Limited's Growth

Supply Network Limited's earnings per share (EPS) grew 12% per year over the last three years. In the last year, its revenue is up 10%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Supply Network Limited Been A Good Investment?

Boasting a total shareholder return of 93% over three years, Supply Network Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

As we noted earlier, Supply Network pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. And given most shareholders are probably very happy with recent returns, they might even think that Geoffrey David deserves a raise!

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Supply Network that you should be aware of before investing.

Switching gears from Supply Network, 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.

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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. 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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