Steve McGovern became the CEO of Dubber Corporation Limited (ASX:DUB) in 2015, 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 assess whether Dubber pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Dubber
Comparing Dubber Corporation Limited's CEO Compensation With the industry
Our data indicates that Dubber Corporation Limited has a market capitalization of AU$414m, and total annual CEO compensation was reported as AU$436k for the year to June 2020. That's a slight decrease of 3.7% on the prior year. Notably, the salary which is AU$240.0k, represents most of the total compensation being paid.
On examining similar-sized companies in the industry with market capitalizations between AU$258m and AU$1.0b, we discovered that the median CEO total compensation of that group was AU$1.1m. This suggests that Steve McGovern is paid below the industry median. Furthermore, Steve McGovern directly owns AU$13m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$240k | AU$240k | 55% |
| Other | AU$196k | AU$213k | 45% |
| Total Compensation | AU$436k | AU$453k | 100% |
On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Although there is a difference in how total compensation is set, Dubber more or less reflects the market in terms of setting the salary. 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.
A Look at Dubber Corporation Limited's Growth Numbers
Dubber Corporation Limited has seen its earnings per share (EPS) increase by 9.4% a year over the past three years. It achieved revenue growth of 74% over the last year.
We like the look of the strong year-on-year improvement in revenue. Combined with modest EPS growth, we get a good impression of the company. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. 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 Dubber Corporation Limited Been A Good Investment?
Most shareholders would probably be pleased with Dubber Corporation Limited for providing a total return of 186% over three years. 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...
As previously discussed, Steve is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. On the other hand, shareholder returns have been have been very pleasing, over the last three years, and that should put a smile on the faces of investors. As a result of the juicy return to investors, CEO compensation may well be quite reasonable.
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 2 warning signs for Dubber that you should be aware of before investing.
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.
When trading Dubber or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About ASX:DUB
Dubber
Provides unified call recording and conversation artificial intelligence services to the telecommunications industry in Europe, the United States, and internationally.
Excellent balance sheet slight.
