What Did Flexiroam's (ASX:FRX) CEO Take Home Last Year?

Jefrey (Jef) Ong became the CEO of Flexiroam Limited (ASX:FRX) in 2014, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Flexiroam

Comparing Flexiroam Limited's CEO Compensation With the industry

Our data indicates that Flexiroam Limited has a market capitalization of AU$12m, and total annual CEO compensation was reported as AU$159k for the year to March 2020. That's a slightly lower by 3.7% over the previous year. Notably, the salary which is AU$154.4k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$261m, the reported median total CEO compensation was AU$342k. Accordingly, Flexiroam pays its CEO under the industry median. Moreover, Jefrey (Jef) Ong also holds AU$2.3m worth of Flexiroam stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. Investors will find it interesting that Flexiroam pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. 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 Flexiroam Limited's Growth Numbers

Flexiroam Limited's earnings per share (EPS) grew 70% per year over the last three years. It saw its revenue drop 49% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Flexiroam Limited Been A Good Investment?

With a three year total loss of 54% for the shareholders, Flexiroam Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Jefrey (Jef) receives almost all of their compensation through a salary. As we noted earlier, Flexiroam pays its CEO lower than the norm for similar-sized companies belonging to the same industry. However, the EPS growth over three years is certainly impressive. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But shareholders will likely want to hold off on any raise for Jefrey (Jef) until investor returns are positive.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 5 warning signs (and 3 which are a bit unpleasant) in Flexiroam 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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