Siva Sivasubramaniam became the CEO of Solution Dynamics Limited (NZSE:SDL) in 2006. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Solution Dynamics
How Does Siva Sivasubramaniam’s Compensation Compare With Similar Sized Companies?
Our data indicates that Solution Dynamics Limited is worth NZ$24m, and total annual CEO compensation is NZ$413k. (This figure is for the year to 2018). Notably, the salary of NZ$413k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under NZ$293m, and the median CEO compensation was NZ$124k.
Thus we can conclude that Siva Sivasubramaniam receives more in total compensation than the median of a group of companies in the same market, and of similar size to Solution Dynamics Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Solution Dynamics has changed from year to year.
Is Solution Dynamics Limited Growing?
On average over the last three years, Solution Dynamics Limited has grown earnings per share (EPS) by 20% each year (using a line of best fit). Its revenue is up 13% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Solution Dynamics Limited Been A Good Investment?
With a total shareholder return of 23% over three years, Solution Dynamics Limited shareholders would, in general, be reasonably content. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary…
We compared the total CEO remuneration paid by Solution Dynamics Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn’t call the CEO pay problematic. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Solution Dynamics.
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.