How Much Did Traffic Technologies' (ASX:TTI) CEO Pocket Last Year?

The CEO of Traffic Technologies Limited (ASX:TTI) is Con Liosatos, and this article examines 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 Traffic Technologies.

See our latest analysis for Traffic Technologies

Comparing Traffic Technologies Limited's CEO Compensation With the industry

At the time of writing, our data shows that Traffic Technologies Limited has a market capitalization of AU$26m, and reported total annual CEO compensation of AU$540k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at AU$493.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below AU$254m, reported a median total CEO compensation of AU$273k. Accordingly, our analysis reveals that Traffic Technologies Limited pays Con Liosatos north of the industry median. Furthermore, Con Liosatos directly owns AU$1.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. Traffic Technologies is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Traffic Technologies Limited's Growth Numbers

Over the last three years, Traffic Technologies Limited has shrunk its earnings per share by 101% per year. In the last year, its revenue is down 7.8%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Traffic Technologies Limited Been A Good Investment?

Most shareholders would probably be pleased with Traffic Technologies Limited for providing a total return of 66% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As previously discussed, Con is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. We're not seeing great strides in EPS, but the company has clearly pleased some investors, given the returns over the last three years. So while we would not say that Con is generously paid, stockholders would want to see some EPS growth before agreeing that a raise is a good idea.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Traffic Technologies that investors should look into moving forward.

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.

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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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