What Can We Learn About TPC Consolidated's (ASX:TPC) CEO Compensation?

December 21, 2020

Charles Huang is the CEO of TPC Consolidated Limited (ASX:TPC), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for TPC Consolidated.

View our latest analysis for TPC Consolidated

How Does Total Compensation For Charles Huang Compare With Other Companies In The Industry?

According to our data, TPC Consolidated Limited has a market capitalization of AU$15m, and paid its CEO total annual compensation worth AU$415k over the year to June 2020. Notably, that's an increase of 23% over the year before. In particular, the salary of AU$317.2k, 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$263m, we found that the median total CEO compensation was AU$415k. This suggests that TPC Consolidated remunerates its CEO largely in line with the industry average. Furthermore, Charles Huang directly owns AU$5.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	AU$317k	AU$305k	76%
Other	AU$97k	AU$32k	24%
Total Compensation	AU$415k	AU$337k	100%

Speaking on an industry level, nearly 24% of total compensation represents salary, while the remainder of 76% is other remuneration. According to our research, TPC Consolidated 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.

ceo-compensation — ASX:TPC CEO Compensation December 22nd 2020

TPC Consolidated Limited's Growth

Over the past three years, TPC Consolidated Limited has seen its earnings per share (EPS) grow by 59% per year. It achieved revenue growth of 3.6% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has TPC Consolidated Limited Been A Good Investment?

TPC Consolidated Limited has generated a total shareholder return of 5.3% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we touched on above, TPC Consolidated Limited 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. However, it's admirable that over the last three years, EPS growth for the company has been impressive, though the same can't be said for investor returns. As a result of these considerations, we would suggest the compensation is reasonable, but looking ahead shareholders will likely want to see healthier returns.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for TPC Consolidated 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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