How Much Is NZME's (NZSE:NZM) CEO Getting Paid?

This article will reflect on the compensation paid to Michael Boggs who has served as CEO of NZME Limited (NZSE:NZM) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for NZME

Comparing NZME Limited's CEO Compensation With the industry

According to our data, NZME Limited has a market capitalization of NZ$130m, and paid its CEO total annual compensation worth NZ$1.0m over the year to December 2019. That's a notable decrease of 22% on last year. In particular, the salary of NZ$806.3k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below NZ$281m, reported a median total CEO compensation of NZ$621k. Accordingly, our analysis reveals that NZME Limited pays Michael Boggs north of the industry median. Furthermore, Michael Boggs directly owns NZ$341k worth of shares in the company.

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. NZME is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

NZME Limited's Growth

Over the last three years, NZME Limited has shrunk its earnings per share by 123% per year. In the last year, its revenue is down 11%.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has NZME Limited Been A Good Investment?

Since shareholders would have lost about 16% over three years, some NZME Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, NZME pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. Add to that declining EPS growth, and you have the perfect recipe for shareholder irritation. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for NZME that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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