Shareholders May Not Be So Generous With Beam Communications Holdings Limited's (ASX:BCC) CEO Compensation And Here's Why

Key Insights

• Beam Communications Holdings to hold its Annual General Meeting on 30th of November
• Salary of AU$361.2k is part of CEO Michael Capocchi's total remuneration
• The total compensation is 67% higher than the average for the industry
• Beam Communications Holdings' three-year loss to shareholders was 27% while its EPS grew by 113% over the past three years

In the past three years, the share price of Beam Communications Holdings Limited (ASX:BCC) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 30th of November. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Beam Communications Holdings

Comparing Beam Communications Holdings Limited's CEO Compensation With The Industry

According to our data, Beam Communications Holdings Limited has a market capitalization of AU$18m, and paid its CEO total annual compensation worth AU$758k over the year to June 2023. We note that's an increase of 31% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$361k.

In comparison with other companies in the Australia Communications industry with market capitalizations under AU$304m, the reported median total CEO compensation was AU$454k. Hence, we can conclude that Michael Capocchi is remunerated higher than the industry median. Furthermore, Michael Capocchi directly owns AU$640k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$361k	AU$433k	48%
Other	AU$397k	AU$147k	52%
Total Compensation	AU$758k	AU$579k	100%

Speaking on an industry level, nearly 53% of total compensation represents salary, while the remainder of 47% is other remuneration. Beam Communications Holdings is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Beam Communications Holdings Limited's Growth Numbers

Beam Communications Holdings Limited's earnings per share (EPS) grew 113% per year over the last three years. It achieved revenue growth of 67% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Beam Communications Holdings Limited Been A Good Investment?

With a three year total loss of 27% for the shareholders, Beam Communications Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for Beam Communications Holdings that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.