Andrew Wilson has been the CEO of Senetas Corporation Limited (ASX:SEN) since 2012, and this article will examine the executive's compensation 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.
Comparing Senetas Corporation Limited's CEO Compensation With the industry
According to our data, Senetas Corporation Limited has a market capitalization of AU$55m, and paid its CEO total annual compensation worth AU$507k over the year to June 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is AU$418.5k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below AU$275m, we found that the median total CEO compensation was AU$424k. So it looks like Senetas compensates Andrew Wilson in line with the median for the industry.
On an industry level, roughly 58% of total compensation represents salary and 42% is other remuneration. It's interesting to note that Senetas pays out a greater portion of remuneration through salary, compared to the 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 Senetas Corporation Limited's Growth Numbers
Over the last three years, Senetas Corporation Limited has shrunk its earnings per share by 109% per year. In the last year, its revenue is up 6.0%.
Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Senetas Corporation Limited Been A Good Investment?
Since shareholders would have lost about 46% over three years, some Senetas Corporation Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Andrew is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
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. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Senetas we think you should know about.
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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