What Can We Learn About Beam Communications Holdings' (ASX:BCC) CEO Compensation?

Simply Wall St
September 07, 2020

This article will reflect on the compensation paid to Michael Capocchi who has served as CEO of Beam Communications Holdings Limited (ASX:BCC) since 2008. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Beam Communications Holdings.

See our latest analysis for Beam Communications Holdings

How Does Total Compensation For Michael Capocchi Compare With Other Companies In The Industry?

Our data indicates that Beam Communications Holdings Limited has a market capitalization of AU$12m, and total annual CEO compensation was reported as AU$701k for the year to June 2020. That's a slightly lower by 4.7% over the previous year. We note that the salary portion, which stands at AU$448.6k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$275m, we found that the median total CEO compensation was AU$417k. Accordingly, our analysis reveals that Beam Communications Holdings Limited pays Michael Capocchi north of the industry median. Furthermore, Michael Capocchi directly owns AU$369k worth of shares in the company.

Component20202019Proportion (2020)
Salary AU$449k AU$419k 64%
Other AU$253k AU$317k 36%
Total CompensationAU$701k AU$736k100%

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. Our data reveals that Beam Communications Holdings allocates salary more or less in line with the wider market. 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.

ASX:BCC CEO Compensation September 7th 2020

Beam Communications Holdings Limited's Growth

Over the past three years, Beam Communications Holdings Limited has seen its earnings per share (EPS) grow by 17% per year. It saw its revenue drop 16% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Beam Communications Holdings Limited Been A Good Investment?

With a three year total loss of 8.0% for the shareholders, Beam Communications Holdings Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Michael is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the company has impressed with its EPS growth, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

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. That's why we did our research, and identified 3 warning signs for Beam Communications Holdings (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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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