Shareholders May Not Be So Generous With Smart Parking Limited's (ASX:SPZ) CEO Compensation And Here's Why

Under the guidance of CEO Paul Gillespie, Smart Parking Limited (ASX:SPZ) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 18 November 2022. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Smart Parking

Comparing Smart Parking Limited's CEO Compensation With The Industry

Our data indicates that Smart Parking Limited has a market capitalization of AU$96m, and total annual CEO compensation was reported as AU$562k for the year to June 2022. We note that's an increase of 10% above last year. Notably, the salary which is AU$329.3k, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$304m, the reported median total CEO compensation was AU$378k. This suggests that Paul Gillespie is paid more than the median for the industry. Moreover, Paul Gillespie also holds AU$1.4m worth of Smart Parking stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	AU$329k	AU$293k	59%
Other	AU$233k	AU$217k	41%
Total Compensation	AU$562k	AU$510k	100%

On an industry level, roughly 74% of total compensation represents salary and 26% is other remuneration. It's interesting to note that Smart Parking allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Smart Parking Limited's Growth

Over the past three years, Smart Parking Limited has seen its earnings per share (EPS) grow by 92% per year. In the last year, its revenue is up 68%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Smart Parking Limited Been A Good Investment?

Smart Parking Limited has served shareholders reasonably well, with a total return of 10.0% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Smart Parking that investors should be aware of in a dynamic business environment.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.