Philip Littlewood became the CEO of Stride Stapled Group (NZSE:SPG) in 2017, 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 Stride Stapled Group.
Note: The company does not report funds from operations, and as a result, we have used earnings per share in our analysis.
How Does Total Compensation For Philip Littlewood Compare With Other Companies In The Industry?
At the time of writing, our data shows that Stride Stapled Group has a market capitalization of NZ$1.1b, and reported total annual CEO compensation of NZ$938k for the year to March 2020. That's a slight decrease of 6.2% on the prior year. Notably, the salary which is NZ$615.0k, represents most of the total compensation being paid.
On comparing similar companies from the same industry with market caps ranging from NZ$550m to NZ$2.2b, we found that the median CEO total compensation was NZ$1.2m. This suggests that Stride Stapled Group remunerates its CEO largely in line with the industry average. Moreover, Philip Littlewood also holds NZ$653k worth of Stride Stapled Group stock directly under their own name.
On an industry level, roughly 51% of total compensation represents salary and 49% is other remuneration. Stride Stapled Group pays out 66% of remuneration in the form of a salary, significantly higher than the industry average. 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.
A Look at Stride Stapled Group's Growth Numbers
Stride Stapled Group has reduced its earnings per share by 7.7% a year over the last three years. It achieved revenue growth of 23% over the last year.
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. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Stride Stapled Group Been A Good Investment?
We think that the total shareholder return of 54%, over three years, would leave most Stride Stapled Group shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Philip is compensated close to the median for companies of its size, and which belong to the same industry. The company has logged solid shareholder returns for the past three years. Meanwhile, revenues have been increasing recently However, on a concerning note, EPS is not growing. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Stride Stapled Group (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
If you decide to trade Stride Stapled Group, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account.
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.