Shareholders May Find It Hard To Justify Increasing Seeka Limited's (NZSE:SEK) CEO Compensation For Now

Key Insights

• Seeka's Annual General Meeting to take place on 16th of April
• Salary of NZ$779.8k is part of CEO Michael Franks's total remuneration
• Total compensation is similar to the industry average
• Seeka's EPS declined by 21% over the past three years while total shareholder loss over the past three years was 30%

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The underwhelming share price performance of Seeka Limited (NZSE:SEK) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. The AGM coming up on 16th of April will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for Seeka

Comparing Seeka Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Seeka Limited has a market capitalization of NZ$145m, and reported total annual CEO compensation of NZ$1.5m for the year to December 2024. That's a notable increase of 67% on last year. In particular, the salary of NZ$779.8k, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the New Zealander Food industry with market capitalizations below NZ$359m, reported a median total CEO compensation of NZ$1.2m. From this we gather that Michael Franks is paid around the median for CEOs in the industry. Furthermore, Michael Franks directly owns NZ$793k worth of shares in the company.

Talking in terms of the industry, salary represented approximately 46% of total compensation out of all the companies we analyzed, while other remuneration made up 54% of the pie. There isn't a significant difference between Seeka and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Seeka Limited's Growth Numbers

Over the last three years, Seeka Limited has shrunk its earnings per share by 21% per year. In the last year, its revenue is up 37%.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Seeka Limited Been A Good Investment?

With a three year total loss of 30% for the shareholders, Seeka Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

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. That's why we did our research, and identified 3 warning signs for Seeka (of which 2 make us uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Seeka, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.