Here's Why EBOS Group Limited's (NZSE:EBO) CEO Compensation Is The Least Of Shareholders' Concerns

Performance at EBOS Group Limited (NZSE:EBO) has been reasonably good and CEO John Cullity has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 27 October 2022. Here is our take on why we think the CEO compensation looks appropriate.

Check out the opportunities and risks within the NZ Healthcare industry.

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

According to our data, EBOS Group Limited has a market capitalization of NZ$6.9b, and paid its CEO total annual compensation worth AU$5.9m over the year to June 2022. That's a notable increase of 58% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.4m.

On examining similar-sized companies in the industry with market capitalizations between NZ$3.5b and NZ$11b, we discovered that the median CEO total compensation of that group was AU$6.0m. This suggests that EBOS Group remunerates its CEO largely in line with the industry average. Moreover, John Cullity also holds NZ$870k worth of EBOS Group stock directly under their own name.

Component	2022	2021	Proportion (2022)
Salary	AU$1.4m	AU$1.4m	24%
Other	AU$4.4m	AU$2.4m	76%
Total Compensation	AU$5.9m	AU$3.7m	100%

On an industry level, around 49% of total compensation represents salary and 51% is other remuneration. It's interesting to note that EBOS Group allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

EBOS Group Limited's Growth

EBOS Group Limited's earnings per share (EPS) grew 5.8% per year over the last three years. In the last year, its revenue is up 17%.

This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. 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 EBOS Group Limited Been A Good Investment?

We think that the total shareholder return of 60%, over three years, would leave most EBOS Group Limited shareholders smiling. 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.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for EBOS Group that investors should be aware of in a dynamic business environment.

Important note: EBOS 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. 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.