Shareholders Will Probably Hold Off On Increasing Zimi Limited's (ASX:ZMM) CEO Compensation For The Time Being

Key Insights

• Zimi's Annual General Meeting to take place on 28th of November
• Salary of AU$286.7k is part of CEO Jordan Tentori's total remuneration
• The overall pay is comparable to the industry average
• Zimi's three-year loss to shareholders was 91% while its EPS grew by 36% over the past three years

The underwhelming share price performance of Zimi Limited (ASX:ZMM) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 28th of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Zimi

How Does Total Compensation For Jordan Tentori Compare With Other Companies In The Industry?

At the time of writing, our data shows that Zimi Limited has a market capitalization of AU$4.9m, and reported total annual CEO compensation of AU$382k for the year to June 2024. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at AU$286.7k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Australia Tech industry with market capitalizations below AU$308m, we found that the median total CEO compensation was AU$357k. This suggests that Zimi remunerates its CEO largely in line with the industry average.

Component	2024	2023	Proportion (2024)
Salary	AU$287k	AU$284k	75%
Other	AU$95k	AU$91k	25%
Total Compensation	AU$382k	AU$376k	100%

On an industry level, around 47% of total compensation represents salary and 53% is other remuneration. It's interesting to note that Zimi 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.

Zimi Limited's Growth

Zimi Limited has seen its earnings per share (EPS) increase by 36% a year over the past three years. Its revenue is up 1,370% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Zimi Limited Been A Good Investment?

Few Zimi Limited shareholders would feel satisfied with the return of -91% over three years. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Zimi you should be aware of, and 3 of them are concerning.

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. 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.