A Look At Cirralto's (ASX:CRO) CEO Remuneration

This article will reflect on the compensation paid to Adrian Floate who has served as CEO of Cirralto Limited (ASX:CRO) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cirralto.

Check out our latest analysis for Cirralto

How Does Total Compensation For Adrian Floate Compare With Other Companies In The Industry?

At the time of writing, our data shows that Cirralto Limited has a market capitalization of AU$189m, and reported total annual CEO compensation of AU$416k for the year to June 2020. Notably, that's a decrease of 30% over the year before. We note that the salary portion, which stands at AU$275.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below AU$259m, reported a median total CEO compensation of AU$416k. So it looks like Cirralto compensates Adrian Floate in line with the median for the industry. Furthermore, Adrian Floate directly owns AU$5.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. According to our research, Cirralto has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Cirralto Limited's Growth

Cirralto Limited has seen its earnings per share (EPS) increase by 44% a year over the past three years. It achieved revenue growth of 1.9% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Cirralto Limited Been A Good Investment?

We think that the total shareholder return of 38%, over three years, would leave most Cirralto Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As previously discussed, Adrian is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Cirralto you should be aware of, and 3 of them are a bit unpleasant.

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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