How Much Is Structural Monitoring Systems Plc (ASX:SMN) CEO Getting Paid?

This article will reflect on the compensation paid to Toby Robert Chandler who has served as CEO of Structural Monitoring Systems Plc (ASX:SMN) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Structural Monitoring Systems.

Check out our latest analysis for Structural Monitoring Systems

How Does Total Compensation For Toby Robert Chandler Compare With Other Companies In The Industry?

Our data indicates that Structural Monitoring Systems Plc has a market capitalization of AU$50m, and total annual CEO compensation was reported as AU$252k for the year to June 2020. Notably, that's an increase of 12% over the year before. We note that the salary portion, which stands at AU$218.7k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below AU$260m, reported a median total CEO compensation of AU$397k. This suggests that Toby Robert Chandler is paid below the industry median.

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. According to our research, Structural Monitoring Systems has allocated a higher percentage of pay to salary in comparison to the wider 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 Structural Monitoring Systems Plc's Growth Numbers

Over the last three years, Structural Monitoring Systems Plc has shrunk its earnings per share by 3.7% per year. In the last year, its revenue is up 17%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Structural Monitoring Systems Plc Been A Good Investment?

With a three year total loss of 64% for the shareholders, Structural Monitoring Systems Plc would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we noted earlier, Structural Monitoring Systems pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But Structural Monitoring Systems has recorded negative shareholder returns and EPS growth over the last three years. In contrast, revenues have increased more recently. Though we believe Toby Robert is modestly compensated, shareholders might want to see positive shareholder returns before agreeing compensation should be raised.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Structural Monitoring Systems (of which 1 is a bit unpleasant!) 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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