Here's What We Learned About The CEO Pay At EML Payments Limited (ASX:EML)

Tom Cregan has been the CEO of EML Payments Limited (ASX:EML) since 2012, and this article will examine the executive's compensation 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 EML Payments.

See our latest analysis for EML Payments

How Does Total Compensation For Tom Cregan Compare With Other Companies In The Industry?

Our data indicates that EML Payments Limited has a market capitalization of AU$1.5b, and total annual CEO compensation was reported as AU$1.6m for the year to June 2020. We note that's a decrease of 40% compared to last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$629k.

For comparison, other companies in the same industry with market capitalizations ranging between AU$527m and AU$2.1b had a median total CEO compensation of AU$1.3m. From this we gather that Tom Cregan is paid around the median for CEOs in the industry. Furthermore, Tom Cregan directly owns AU$47m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. It's interesting to note that EML Payments allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at EML Payments Limited's Growth Numbers

Over the past three years, EML Payments Limited has seen its earnings per share (EPS) grow by 31% per year. It achieved revenue growth of 24% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 EML Payments Limited Been A Good Investment?

We think that the total shareholder return of 126%, over three years, would leave most EML Payments Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

As we noted earlier, EML Payments pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Tom is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

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. That's why we did some digging and identified 2 warning signs for EML Payments 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.

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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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