This article will reflect on the compensation paid to Guy Maine who has served as CEO of Bill Identity Limited (ASX:BID) since 2018. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Bill Identity
How Does Total Compensation For Guy Maine Compare With Other Companies In The Industry?
According to our data, Bill Identity Limited has a market capitalization of AU$157m, and paid its CEO total annual compensation worth AU$650k over the year to June 2020. That's a notable increase of 33% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$300k.
On comparing similar-sized companies in the industry with market capitalizations below AU$252m, we found that the median total CEO compensation was AU$344k. Hence, we can conclude that Guy Maine is remunerated higher than the industry median. Furthermore, Guy Maine directly owns AU$198k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$300k | AU$275k | 46% |
| Other | AU$350k | AU$215k | 54% |
| Total Compensation | AU$650k | AU$490k | 100% |
Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. Bill Identity sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Bill Identity Limited's Growth
Over the past three years, Bill Identity Limited has seen its earnings per share (EPS) grow by 26% per year. It achieved revenue growth of 77% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Bill Identity Limited Been A Good Investment?
Most shareholders would probably be pleased with Bill Identity Limited for providing a total return of 599% over three years. 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, Bill Identity pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But EPS growth and shareholder returns have been top-notch for the past three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Guy 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. We've identified 2 warning signs for Bill Identity that investors should be aware of in a dynamic business environment.
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.
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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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About ASX:OPA
Optima Technology Group
Optima Technology Group Limited, a software technology company, provides automated and secure energy data management solutions focused on Net Zero reporting and bill management and procurement planning in Australia, New Zealand, the United States, the United Kingdom, and Europe.
Flawless balance sheet and slightly overvalued.
