Most Shareholders Will Probably Find That The CEO Compensation For Pointerra Limited (ASX:3DP) Is Reasonable

Performance at Pointerra Limited (ASX:3DP) has been reasonably good and CEO Ian Olson has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 23 November 2022. We present our case of why we think CEO compensation looks fair.

Our analysis indicates that 3DP is potentially undervalued!

How Does Total Compensation For Ian Olson Compare With Other Companies In The Industry?

At the time of writing, our data shows that Pointerra Limited has a market capitalization of AU$132m, and reported total annual CEO compensation of AU$492k for the year to June 2022. That is, the compensation was roughly the same as last year. Notably, the salary which is AU$375.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$295m, the reported median total CEO compensation was AU$491k. From this we gather that Ian Olson is paid around the median for CEOs in the industry. Furthermore, Ian Olson directly owns AU$8.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	AU$375k	AU$455k	76%
Other	AU$117k	AU$26k	24%
Total Compensation	AU$492k	AU$481k	100%

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. Pointerra pays out 76% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Pointerra Limited's Growth

Over the past three years, Pointerra Limited has seen its earnings per share (EPS) grow by 1.7% per year. It achieved revenue growth of 146% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. Combined with modest EPS growth, we get a good impression of the company. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Pointerra Limited Been A Good Investment?

We think that the total shareholder return of 187%, over three years, would leave most Pointerra Limited shareholders smiling. 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...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed 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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Pointerra that you should be aware of before investing.

Switching gears from Pointerra, 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. 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.