The CEO of Nuheara Limited (ASX:NUH) is Justin Miller. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Justin Miller's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Nuheara Limited has a market cap of AU$18m, and reported total annual CEO compensation of AU$438k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$400k. We took a group of companies with market capitalizations below AU$291m, and calculated the median CEO total compensation to be AU$378k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 54% of total compensation represents salary and 46% is other remuneration. According to our research, Nuheara has allocated a higher percentage of pay to salary in comparison to the broader sector.
So Justin Miller is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at Nuheara has changed over time.
Is Nuheara Limited Growing?
On average over the last three years, Nuheara Limited has shrunk earnings per share by 1.3% each year (measured with a line of best fit). In the last year, its revenue is down 37%.
In the last three years the company has failed to grow earnings per share. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Nuheara Limited Been A Good Investment?
Given the total loss of 83% over three years, many shareholders in Nuheara Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Justin Miller is paid around the same as most CEOs of similar size companies.
After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Taking a breather from CEO compensation, we've spotted 5 warning signs for Nuheara (of which 1 is concerning!) you should know about in order to have a holistic understanding of the stock.
Important note: Nuheara may not be the best stock to buy. 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. Thank you for reading.
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