Justin Miller is the CEO of Nuheara Limited (ASX:NUH), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Justin Miller Compare With Other Companies In The Industry?
Our data indicates that Nuheara Limited has a market capitalization of AU$83m, and total annual CEO compensation was reported as AU$392k for the year to June 2020. That's a notable decrease of 11% on last year. We note that the salary portion, which stands at AU$357.9k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$259m, the reported median total CEO compensation was AU$383k. So it looks like Nuheara compensates Justin Miller in line with the median for the industry. Furthermore, Justin Miller directly owns AU$3.3m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, roughly 62% of total compensation represents salary and 38% is other remuneration. It's interesting to note that Nuheara pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Nuheara Limited's Growth Numbers
Nuheara Limited has reduced its earnings per share by 12% a year over the last three years. It saw its revenue drop 22% over the last year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Nuheara Limited Been A Good Investment?
With a three year total loss of 29% for the shareholders, Nuheara Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Nuheara pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Nuheara you should be aware of, and 2 of them make us uncomfortable.
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. 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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