How Much Is Spark Infrastructure Group (ASX:SKI) Paying Its CEO?

Rick Francis became the CEO of Spark Infrastructure Group (ASX:SKI) in 2012, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Spark Infrastructure Group.

Check out our latest analysis for Spark Infrastructure Group

How Does Total Compensation For Rick Francis Compare With Other Companies In The Industry?

At the time of writing, our data shows that Spark Infrastructure Group has a market capitalization of AU$3.6b, and reported total annual CEO compensation of AU$1.6m for the year to December 2019. That's a notable decrease of 10% on last year. We note that the salary portion, which stands at AU$854.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from AU$2.7b to AU$8.8b, the reported median CEO total compensation was AU$1.3m. From this we gather that Rick Francis is paid around the median for CEOs in the industry. Moreover, Rick Francis also holds AU$1.4m worth of Spark Infrastructure Group stock directly under their own name.

On an industry level, roughly 35% of total compensation represents salary and 65% is other remuneration. According to our research, Spark Infrastructure Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Spark Infrastructure Group's Growth Numbers

Over the last three years, Spark Infrastructure Group has shrunk its earnings per share by 1.4% per year. Its revenue is down 1.3% over the previous year.

Its a bit disappointing to see that the company has failed to grow its EPS. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Spark Infrastructure Group Been A Good Investment?

Spark Infrastructure Group has not done too badly by shareholders, with a total return of 4.8%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, Spark Infrastructure Group is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. According to our analysis, Spark Infrastructure Group is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. These figures do not go well against CEO compensation, which is more or less equal to the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Spark Infrastructure Group (of which 3 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Spark Infrastructure Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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