Joe D'Addio became the CEO of MOQ Limited (ASX:MOQ) in 2017, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for MOQ.
Check out our latest analysis for MOQ
How Does Total Compensation For Joe D'Addio Compare With Other Companies In The Industry?
At the time of writing, our data shows that MOQ Limited has a market capitalization of AU$29m, and reported total annual CEO compensation of AU$204k for the year to June 2020. That's a slightly lower by 6.7% over the previous year. Notably, the salary which is AU$186.7k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below AU$257m, reported a median total CEO compensation of AU$321k. In other words, MOQ pays its CEO lower than the industry median. Moreover, Joe D'Addio also holds AU$2.9m worth of MOQ stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$187k | AU$200k | 91% |
| Other | AU$18k | AU$19k | 9% |
| Total Compensation | AU$204k | AU$219k | 100% |
Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. MOQ pays out 91% 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.
MOQ Limited's Growth
Over the last three years, MOQ Limited has shrunk its earnings per share by 94% per year. In the last year, its revenue is down 3.9%.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has MOQ Limited Been A Good Investment?
With a three year total loss of 28% for the shareholders, MOQ Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we touched on above, MOQ Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. We can't say the CEO compensation is high, but shareholders will be cold to a bump at this stage, considering negative investor returns.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for MOQ that investors should look into moving forward.
Important note: MOQ is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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About ASX:MOQ
MOQ
MOQ Limited develops, builds, and acquires cloud focused technology businesses in Australia.
Mediocre balance sheet and slightly overvalued.
