This article will reflect on the compensation paid to Sean Smith who has served as CEO of Frugl Group Limited (ASX:FGL) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Frugl Group.
Check out our latest analysis for Frugl Group
Comparing Frugl Group Limited's CEO Compensation With the industry
Our data indicates that Frugl Group Limited has a market capitalization of AU$13m, and total annual CEO compensation was reported as AU$357k for the year to June 2020. We note that's a decrease of 31% compared to last year. We note that the salary portion, which stands at AU$260.0k 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$334k. This suggests that Frugl Group remunerates its CEO largely in line with the industry average.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$260k | AU$247k | 73% |
| Other | AU$97k | AU$268k | 27% |
| Total Compensation | AU$357k | AU$515k | 100% |
Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. According to our research, Frugl Group 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.
Frugl Group Limited's Growth
Over the past three years, Frugl Group Limited has seen its earnings per share (EPS) grow by 72% per year. In the last year, its revenue is down 47%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Frugl Group Limited Been A Good Investment?
Given the total shareholder loss of 87% over three years, many shareholders in Frugl Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As we noted earlier, Frugl Group pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, EPS growth is positive over the same time frame. Overall, we wouldn't say Sean is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 5 warning signs for Frugl Group (4 are significant!) that you should be aware of before investing here.
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.
When trading Frugl Group 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: AI Stock Screener & Alerts
Our new AI Stock Screener scans the market every day to uncover opportunities.
• Dividend Powerhouses (3%+ Yield)
• Undervalued Small Caps with Insider Buying
• High growth Tech and AI Companies
Or build your own from over 50 metrics.
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:IFG
InFocus Group Holdings
Engages in the development, marketing, and customer support of its grocery comparison and data analytics products and services in Australia.
Medium-low with imperfect balance sheet.
