Stock Analysis

What Can We Learn About Locality Planning Energy Holdings' (ASX:LPE) CEO Compensation?

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The CEO of Locality Planning Energy Holdings Limited (ASX:LPE) is Damien Glanville, and this article examines 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.

See our latest analysis for Locality Planning Energy Holdings

Comparing Locality Planning Energy Holdings Limited's CEO Compensation With the industry

According to our data, Locality Planning Energy Holdings Limited has a market capitalization of AU$13m, and paid its CEO total annual compensation worth AU$403k over the year to June 2020. That's a notable increase of 14% on last year. In particular, the salary of AU$350.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under AU$258m, the reported median total CEO compensation was AU$209k. Accordingly, our analysis reveals that Locality Planning Energy Holdings Limited pays Damien Glanville north of the industry median. Moreover, Damien Glanville also holds AU$1.8m worth of Locality Planning Energy Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary AU$350k AU$325k 87%
Other AU$53k AU$28k 13%
Total CompensationAU$403k AU$353k100%

Talking in terms of the industry, salary represented approximately 43% of total compensation out of all the companies we analyzed, while other remuneration made up 57% of the pie. Locality Planning Energy Holdings pays out 87% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ASX:LPE CEO Compensation February 15th 2021

A Look at Locality Planning Energy Holdings Limited's Growth Numbers

Over the past three years, Locality Planning Energy Holdings Limited has seen its earnings per share (EPS) grow by 56% per year. In the last year, its revenue is up 55%.

This demonstrates that the company has been improving recently and is good news for the shareholders. 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 Locality Planning Energy Holdings Limited Been A Good Investment?

Since shareholders would have lost about 81% over three years, some Locality Planning Energy Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As previously discussed, Damien is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the company has impressed with its EPS growth, but it's disappointing to see negative shareholder returns over the same period. Although we'd stop short of calling it inappropriate, we think Damien is earning a very handsome sum.

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 Locality Planning Energy Holdings you should be aware of, and 1 of them is a bit unpleasant.

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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