What Can We Learn About Smart Parking's (ASX:SPZ) CEO Compensation?

By
Simply Wall St
Published
October 07, 2020

Paul Gillespie became the CEO of Smart Parking Limited (ASX:SPZ) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Smart Parking.

Check out our latest analysis for Smart Parking

How Does Total Compensation For Paul Gillespie Compare With Other Companies In The Industry?

At the time of writing, our data shows that Smart Parking Limited has a market capitalization of AU$37m, and reported total annual CEO compensation of AU$533k for the year to June 2020. That's a slight decrease of 5.9% on the prior year. Notably, the salary which is AU$301.7k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below AU$280m, we found that the median total CEO compensation was AU$366k. Accordingly, our analysis reveals that Smart Parking Limited pays Paul Gillespie north of the industry median. Moreover, Paul Gillespie also holds AU$272k worth of Smart Parking stock directly under their own name.

Component20202019Proportion (2020)
Salary AU$302k AU$311k 57%
Other AU$231k AU$255k 43%
Total CompensationAU$533k AU$566k100%

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. Smart Parking is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ASX:SPZ CEO Compensation October 8th 2020

A Look at Smart Parking Limited's Growth Numbers

Over the last three years, Smart Parking Limited has shrunk its earnings per share by 91% per year. In the last year, its revenue is down 21%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Smart Parking Limited Been A Good Investment?

With a three year total loss of 55% for the shareholders, Smart Parking Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Smart Parking pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for Smart Parking that investors should be aware of in a dynamic business environment.

Switching gears from Smart Parking, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Promoted
If you decide to trade Smart Parking, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.


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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.


Simply Wall St character - Warren

Simply Wall St

Simply Wall St is a financial technology startup focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of equity analysts with a public, market-beating track record. Learn more about the team behind Simply Wall St.