Increases to Novatti Group Limited's (ASX:NOV) CEO Compensation Might Cool off for now

CEO Peter Cook has done a decent job of delivering relatively good performance at Novatti Group Limited (ASX:NOV) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 22 November 2022. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Novatti Group

Comparing Novatti Group Limited's CEO Compensation With The Industry

Our data indicates that Novatti Group Limited has a market capitalization of AU$89m, and total annual CEO compensation was reported as AU$852k for the year to June 2022. That's a modest increase of 6.3% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$403k.

On comparing similar-sized companies in the industry with market capitalizations below AU$295m, we found that the median total CEO compensation was AU$491k. Hence, we can conclude that Peter Cook is remunerated higher than the industry median.

Component	2022	2021	Proportion (2022)
Salary	AU$403k	AU$433k	47%
Other	AU$449k	AU$368k	53%
Total Compensation	AU$852k	AU$801k	100%

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. Novatti Group pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Novatti Group Limited's Growth

Novatti Group Limited has reduced its earnings per share by 9.2% a year over the last three years. It achieved revenue growth of 77% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Novatti Group Limited Been A Good Investment?

Novatti Group Limited has served shareholders reasonably well, with a total return of 33% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Although the company has performed relatively well, we still think there are some areas that could be improved. We still think that some shareholders will be hesitant of increasing CEO pay until EPS growth improves, since they are already paid higher than the industry.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 5 warning signs (and 2 which don't sit too well with us) in Novatti Group we think you should know about.

Switching gears from Novatti Group, 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.