Should You Worry About Speedcast International Limited’s (ASX:SDA) CEO Pay Cheque?

PJ Beylier has been the CEO of Speedcast International Limited (ASX:SDA) since 2004. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Speedcast International

How Does PJ Beylier’s Compensation Compare With Similar Sized Companies?

According to our data, Speedcast International Limited has a market capitalization of AU$922m, and pays its CEO total annual compensation worth US$1.0m. (This number is for the twelve months until December 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$481k. We examined companies with market caps from US$400m to US$1.6b, and discovered that the median CEO total compensation of that group was US$985k.

So PJ Beylier is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at Speedcast International has changed from year to year.

ASX:SDA CEO Compensation, April 13th 2019
ASX:SDA CEO Compensation, April 13th 2019

Is Speedcast International Limited Growing?

On average over the last three years, Speedcast International Limited has shrunk earnings per share by 27% each year (measured with a line of best fit). It achieved revenue growth of 21% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Speedcast International Limited Been A Good Investment?

With a three year total loss of 4.1%, Speedcast International Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

PJ Beylier is paid around what is normal the leaders of comparable size companies.

After looking at EPS and total shareholder returns, it’s certainly hard to argue the company has performed well, since both metrics are down. Suffice it to say, we don’t think the CEO is underpaid! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Speedcast International (free visualization of insider trades).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.