Stock Analysis

Why Shaver Shop Group's (ASX:SSG) CEO Pay Matters

  •  Updated
Source: Shutterstock

Cameron Fox became the CEO of Shaver Shop Group Limited (ASX:SSG) in 2008, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Shaver Shop Group

How Does Total Compensation For Cameron Fox Compare With Other Companies In The Industry?

Our data indicates that Shaver Shop Group Limited has a market capitalization of AU$137m, and total annual CEO compensation was reported as AU$822k for the year to June 2020. We note that's an increase of 21% above last year. In particular, the salary of AU$500.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$257m, reported a median total CEO compensation of AU$798k. This suggests that Shaver Shop Group remunerates its CEO largely in line with the industry average. Furthermore, Cameron Fox directly owns AU$4.9m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary AU$500k AU$550k 61%
Other AU$322k AU$127k 39%
Total CompensationAU$822k AU$677k100%

On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. Our data reveals that Shaver Shop Group allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ASX:SSG CEO Compensation January 12th 2021

A Look at Shaver Shop Group Limited's Growth Numbers

Over the past three years, Shaver Shop Group Limited has seen its earnings per share (EPS) grow by 6.6% per year. In the last year, its revenue is up 16%.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 Shaver Shop Group Limited Been A Good Investment?

Boasting a total shareholder return of 196% over three years, Shaver Shop Group 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.

In Summary...

As we noted earlier, Shaver Shop Group pays its CEO in line with similar-sized companies belonging to the same industry. However, the company's EPS growth numbers over the last three years is not that impressive. At the same time, shareholder returns have remained strong over the same period. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before a bump in pay.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Shaver Shop Group that investors should look into moving forward.

Important note: Shaver Shop 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.

If you decide to trade Shaver Shop Group, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

Valuation is complex, but we're helping make it simple.

Find out whether Shaver Shop Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis