Stock Analysis

What Does CTI Logistics' (ASX:CLX) CEO Pay Reveal?

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ASX:CLX
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Bruce Saxild is the CEO of CTI Logistics Limited (ASX:CLX), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for CTI Logistics

How Does Total Compensation For Bruce Saxild Compare With Other Companies In The Industry?

According to our data, CTI Logistics Limited has a market capitalization of AU$51m, and paid its CEO total annual compensation worth AU$580k over the year to June 2020. That's a fairly small increase of 5.0% over the previous year. In particular, the salary of AU$540.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$261m, we found that the median total CEO compensation was AU$521k. So it looks like CTI Logistics compensates Bruce Saxild in line with the median for the industry. Moreover, Bruce Saxild also holds AU$2.1m worth of CTI Logistics stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary AU$540k AU$512k 93%
Other AU$40k AU$40k 7%
Total CompensationAU$580k AU$552k100%

On an industry level, around 91% of total compensation represents salary and 9.3% is other remuneration. There isn't a significant difference between CTI Logistics and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ASX:CLX CEO Compensation January 31st 2021

A Look at CTI Logistics Limited's Growth Numbers

CTI Logistics Limited has reduced its earnings per share by 97% a year over the last three years. In the last year, its revenue is up 1.6%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has CTI Logistics Limited Been A Good Investment?

Since shareholders would have lost about 38% over three years, some CTI Logistics Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, CTI Logistics pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 3 warning signs for CTI Logistics you should be aware of, and 2 of them are significant.

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