Ed Clarke became the CEO of Yojee Limited (ASX:YOJ) in 2016, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Yojee
How Does Total Compensation For Ed Clarke Compare With Other Companies In The Industry?
At the time of writing, our data shows that Yojee Limited has a market capitalization of AU$230m, and reported total annual CEO compensation of AU$324k for the year to June 2020. Notably, that's an increase of 19% over the year before. Notably, the salary which is AU$296.7k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations ranging from AU$136m to AU$544m, the reported median CEO total compensation was AU$761k. That is to say, Ed Clarke is paid under the industry median.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$297k | AU$246k | 92% |
| Other | AU$27k | AU$27k | 8% |
| Total Compensation | AU$324k | AU$273k | 100% |
On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. According to our research, Yojee 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.
A Look at Yojee Limited's Growth Numbers
Yojee Limited has seen its earnings per share (EPS) increase by 9.2% a year over the past three years. It achieved revenue growth of 29% over the last year.
We like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Yojee Limited Been A Good Investment?
Yojee Limited has generated a total shareholder return of 14% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As we touched on above, Yojee Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, EPS growth and shareholder returns over the past three years have not impressed us. Consequently, despite CEO compensation being reasonable by all accounts, shareholders will likely want to see more growth before they agree to a potential bump.
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. In our study, we found 3 warning signs for Yojee you should be aware of, and 2 of them are a bit unpleasant.
Switching gears from Yojee, 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. 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:YOJ
Medium-low with excellent balance sheet.
