Key Things To Understand About Delegat Group's (NZSE:DGL) CEO Pay Cheque

John Freeman became the CEO of Delegat Group Limited (NZSE:DGL) in 2018, 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 Delegat Group.

Check out our latest analysis for Delegat Group

How Does Total Compensation For John Freeman Compare With Other Companies In The Industry?

At the time of writing, our data shows that Delegat Group Limited has a market capitalization of NZ$1.5b, and reported total annual CEO compensation of NZ$1.1m for the year to June 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is NZ$809.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from NZ$560m to NZ$2.2b, the reported median CEO total compensation was NZ$1.2m. This suggests that Delegat Group remunerates its CEO largely in line with the industry average.

On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. According to our research, Delegat Group has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Delegat Group Limited's Growth

Over the past three years, Delegat Group Limited has seen its earnings per share (EPS) grow by 16% per year. Its revenue is up 9.4% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. 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 Delegat Group Limited Been A Good Investment?

Most shareholders would probably be pleased with Delegat Group Limited for providing a total return of 97% 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.

To Conclude...

As previously discussed, John is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that John is compensated rather modestly, given the solid company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Delegat Group that investors should be aware of in a dynamic business environment.

Important note: Delegat 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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