Shareholders May Be A Bit More Conservative With Felix Group Holdings Ltd's (ASX:FLX) CEO Compensation For Now

Key Insights

• Felix Group Holdings to hold its Annual General Meeting on 21st of November
• CEO Mike Davis' total compensation includes salary of AU$278.5k
• Total compensation is similar to the industry average
• Felix Group Holdings' EPS grew by 39% over the past three years while total shareholder loss over the past three years was 23%

The underwhelming share price performance of Felix Group Holdings Ltd (ASX:FLX) in the past three years would have disappointed many shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 21st of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Felix Group Holdings

How Does Total Compensation For Mike Davis Compare With Other Companies In The Industry?

Our data indicates that Felix Group Holdings Ltd has a market capitalization of AU$47m, and total annual CEO compensation was reported as AU$343k for the year to June 2024. We note that's an increase of 8.3% above last year. Notably, the salary which is AU$278.5k, represents most of the total compensation being paid.

On comparing similar-sized companies in the Australian Software industry with market capitalizations below AU$309m, we found that the median total CEO compensation was AU$457k. So it looks like Felix Group Holdings compensates Mike Davis in line with the median for the industry. Furthermore, Mike Davis directly owns AU$991k worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. Felix Group Holdings pays out 81% 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.

Felix Group Holdings Ltd's Growth

Felix Group Holdings Ltd has seen its earnings per share (EPS) increase by 39% a year over the past three years. It achieved revenue growth of 34% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Felix Group Holdings Ltd Been A Good Investment?

With a three year total loss of 23% for the shareholders, Felix Group Holdings Ltd would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Felix Group Holdings (2 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Felix Group Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.