What Can We Make Of Cirrus Networks Holdings' (ASX:CNW) CEO Compensation?

Matt Sullivan is the CEO of Cirrus Networks Holdings Limited (ASX:CNW), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cirrus Networks Holdings.

View our latest analysis for Cirrus Networks Holdings

How Does Total Compensation For Matt Sullivan Compare With Other Companies In The Industry?

Our data indicates that Cirrus Networks Holdings Limited has a market capitalization of AU$28m, and total annual CEO compensation was reported as AU$301k for the year to June 2020. That's a notable decrease of 15% on last year. We note that the salary portion, which stands at AU$265.3k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below AU$264m, reported a median total CEO compensation of AU$399k. From this we gather that Matt Sullivan is paid around the median for CEOs in the industry. Moreover, Matt Sullivan also holds AU$1.4m worth of Cirrus Networks Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. Cirrus Networks Holdings pays out 88% 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.

A Look at Cirrus Networks Holdings Limited's Growth Numbers

Over the past three years, Cirrus Networks Holdings Limited has seen its earnings per share (EPS) grow by 78% per year. It achieved revenue growth of 8.0% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Cirrus Networks Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 82% over three years, Cirrus Networks Holdings 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 previously discussed, Matt is compensated close to the median for companies of its size, and which belong to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Also, such solid returns might lead to shareholders warming to the idea of 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. That's why we did some digging and identified 2 warning signs for Cirrus Networks Holdings that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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