Advertisement
How Does EROAD's (NZSE:ERD) CEO Pay Compare With Company Performance?
Steven Newman has been the CEO of EROAD Limited (NZSE:ERD) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. 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 EROAD
Comparing EROAD Limited's CEO Compensation With the industry
According to our data, EROAD Limited has a market capitalization of NZ$431m, and paid its CEO total annual compensation worth NZ$1.0m over the year to March 2020. Notably, that's an increase of 39% over the year before. In particular, the salary of NZ$590.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations ranging from NZ$279m to NZ$1.1b, the reported median CEO total compensation was NZ$768k. This suggests that Steven Newman is paid more than the median for the industry. Furthermore, Steven Newman directly owns NZ$631k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | NZ$590k | NZ$567k | 57% |
| Other | NZ$450k | NZ$181k | 43% |
| Total Compensation | NZ$1.0m | NZ$749k | 100% |
On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. Although there is a difference in how total compensation is set, EROAD more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at EROAD Limited's Growth Numbers
Over the past three years, EROAD Limited has seen its earnings per share (EPS) grow by 92% per year. It achieved revenue growth of 24% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has EROAD Limited Been A Good Investment?
With a total shareholder return of 32% over three years, EROAD Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As we touched on above, EROAD Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has impressed us with its EPS growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize CEO compensation, though we'd recommend further research on management.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for EROAD that you should be aware of before investing.
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.
If you decide to trade EROAD, 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. Promoted
Valuation is complex, but we're here to simplify it.
Discover if EROAD might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisThis 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.
About NZSE:ERD
EROAD
Provides electronic on-board units and software as a service to the transport industry in New Zealand, the United States, and Australia.
Adequate balance sheet and slightly overvalued.
Similar Companies
Market Insights
Advertisement
Weekly Picks
CE
Ceazar on Sparc AI ·
When GPS fails: this small cap is fixing a $54B drone problem
Fair Value:US$3.8756.3% undervalued
13 followersusers have followed this narrative
0 commentsusers have commented on this narrative
3 likesusers have liked this narrative
BL
BlackGoat on IREN ·
IREN's Bold Moves in Sustainable Bitcoin Mining & AI Data Centers
Fair Value:US$71.4852.5% undervalued
211 followersusers have followed this narrative
6 commentsusers have commented on this narrative
32 likesusers have liked this narrative
HE
HedgeY on Arm Holdings ·
The Architecture Layer of AI Computing - But Priced Like the Future Already Arrived?
Fair Value:US$43043.1% undervalued
13 followersusers have followed this narrative
1 commentusers have commented on this narrative
3 likesusers have liked this narrative
HI
Hidden_Rock_Capital on Fiserv ·
Temporary "perfect storm" leads to opportunity to buy financial services leader for less than 5x long-term earnings
Fair Value:US$119.9954.8% undervalued
21 followersusers have followed this narrative
0 commentsusers have commented on this narrative
9 likesusers have liked this narrative
Recently Updated Narratives
NE
newsfinder11221 on Lotus Technology ·
Lotus Technology: A Technology-Driven Luxury EV Brand with a Promising Turnaround Story
Fair Value:US$2.462.9% undervalued
1 followerusers have followed this narrative
0 commentsusers have commented on this narrative
0 likesusers have liked this narrative
ON
Ontological on Robo.ai ·
Robo.ai and Abu Dhabi Enterprise Jointly Establish AI Industrial Group Alif Holding to Serve Infrastructure, Government and Industrial Secto
Fair Value:US$0.0026117.2k% overvalued
1 followerusers have followed this narrative
0 commentsusers have commented on this narrative
0 likesusers have liked this narrative
ON
Ontological on Lotus Technology ·
Lotus Tech, Finloop and FOMO Pay Collaborate to Explore Vehicle Tokenization
Fair Value:US$2.462.9% undervalued
1 followerusers have followed this narrative
2 commentsusers have commented on this narrative
0 likesusers have liked this narrative
Popular Narratives
CU
CubanEros on Microsoft ·
A wonderful business at reasonable price.
Fair Value:US$419.916.3% undervalued
92 followersusers have followed this narrative
0 commentsusers have commented on this narrative
7 likesusers have liked this narrative
OS
oscargarcia on NVIDIA ·
The company that went from selling GPUs to gamers to becoming the AI arms dealer of the 21st century.
Fair Value:US$28029.6% undervalued
204 followersusers have followed this narrative
9 commentsusers have commented on this narrative
15 likesusers have liked this narrative
BE
benjamin_lvieq on PayPal Holdings ·
PayPal: PayPal Doesn't Need to Grow – It Needs to Stop Falling – A Mispriced Cash Machine With a Cannibal Buyback
Fair Value:US$6510.3% undervalued
73 followersusers have followed this narrative
2 commentsusers have commented on this narrative
11 likesusers have liked this narrative
Trending Discussion
BL
Blegells on Terra Balcanica Resources ·
⏫42X THE AVERAGE DAILY TRADING VOLUME TODAY, JULY 28 🐂🐂🐂 FORTY-TWO!
1
|0
DE
derek_3wsdg on Teladoc Health ·
You’ve overlooked the activist investor factor. Travis Cocke’s Voss has announced 5% ownership through a 13G filing. They’ve added to that 5% since, and in doing so, have created a structural trap door for 27.42 Million Shares actively sold short. Chuck will announce lots of positives on July 29 but it’s what Voss announces shortly after that will rock the overextended Teledoc shorts. The Walmart partnership is the tip of the iceberg. The market is missing the sheer regulatory and enterprise friction of modern corporate healthcare. Teladoc isn't a "consumer app"; it is the primary digital infrastructure integrated directly into the legacy backends of Tier-1 insurance companies and fortune 500 employers, covering 105 million+ lives. Teladoc is acting as the digital top-of-funnel engine for the world's largest retailer. If Voss pushes the narrative that Teladoc is effectively the outsourced digital brain of Walmart's entire healthcare footprint, the fair value shifts from a basic health multiple to an enterprise distribution premium. Additionally , we are in a structural gold rush for high-quality, legally compliant, longitudinal medical data to train vertical healthcare AI models. Large technology hyperscalers and pharmaceutical giants cannot simply scrape the internet for this; they need structured clinical inputs. Teladoc sits on one of the largest de-identified virtual medical datasets on earth. From the activist playbook , we’ll see Voss demand the immediate creation of a Data & Diagnostics Licensing Division, transforming a legacy liability into an incredibly high-margin, pure-software data asset that requires zero human clinician hours to scale. Chuck is doing great work and deserves credi5 for the Teledoc turnaround but it will be Travis Cocke who will be responsible for a share price way beyond your $15 valuation.
1
|0
