Tim Levy became the CEO of Family Zone Cyber Safety Limited (ASX:FZO) in 2014, 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 Family Zone Cyber Safety pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Tim Levy Compare With Other Companies In The Industry?
At the time of writing, our data shows that Family Zone Cyber Safety Limited has a market capitalization of AU$191m, and reported total annual CEO compensation of AU$276k for the year to June 2020. We note that's a decrease of 8.2% compared to last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$63k.
On comparing similar-sized companies in the industry with market capitalizations below AU$261m, we found that the median total CEO compensation was AU$334k. So it looks like Family Zone Cyber Safety compensates Tim Levy in line with the median for the industry. Furthermore, Tim Levy directly owns AU$5.4m 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 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. Family Zone Cyber Safety sets aside a smaller share of compensation for salary, in comparison to the overall 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 Family Zone Cyber Safety Limited's Growth Numbers
Family Zone Cyber Safety Limited has seen its earnings per share (EPS) increase by 30% a year over the past three years. Its revenue is up 22% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Family Zone Cyber Safety Limited Been A Good Investment?
Given the total shareholder loss of 18% over three years, many shareholders in Family Zone Cyber Safety Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Family Zone Cyber Safety pays its CEO in line with similar-sized companies belonging to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.
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 did our research and identified 2 warning signs (and 1 which doesn't sit too well with us) in Family Zone Cyber Safety we think you should know about.
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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