This Is Why PaySauce Limited's (NZSE:PYS) CEO Compensation Looks Appropriate

Key Insights

• PaySauce's Annual General Meeting to take place on 14th of September
• Total pay for CEO Asantha Wijeyeratne includes NZ$213.7k salary
• Total compensation is 60% below industry average
• PaySauce's three-year loss to shareholders was 42% while its EPS grew by 48% over the past three years

Shareholders may be wondering what CEO Asantha Wijeyeratne plans to do to improve the less than great performance at PaySauce Limited (NZSE:PYS) recently. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 14th of September. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for PaySauce

Comparing PaySauce Limited's CEO Compensation With The Industry

At the time of writing, our data shows that PaySauce Limited has a market capitalization of NZ$31m, and reported total annual CEO compensation of NZ$249k for the year to March 2023. We note that's an increase of 17% above last year. We note that the salary portion, which stands at NZ$213.7k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the New Zealand Professional Services industry with market capitalizations below NZ$340m, we found that the median total CEO compensation was NZ$623k. Accordingly, PaySauce pays its CEO under the industry median. Furthermore, Asantha Wijeyeratne directly owns NZ$6.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	NZ$214k	NZ$213k	86%
Other	NZ$36k	-	14%
Total Compensation	NZ$249k	NZ$213k	100%

Speaking on an industry level, nearly 71% of total compensation represents salary, while the remainder of 29% is other remuneration. According to our research, PaySauce has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at PaySauce Limited's Growth Numbers

Over the past three years, PaySauce Limited has seen its earnings per share (EPS) grow by 48% per year. It achieved revenue growth of 65% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. 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 PaySauce Limited Been A Good Investment?

Few PaySauce Limited shareholders would feel satisfied with the return of -42% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss is certainly disheartening. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

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. We identified 3 warning signs for PaySauce (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Important note: PaySauce 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.