What Can We Make Of TIL Logistics Group's (NZSE:TLL) CEO Compensation?

Alan Pearson became the CEO of TIL Logistics Group Limited (NZSE:TLL) in 2018, 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 TIL Logistics Group.

View our latest analysis for TIL Logistics Group

How Does Total Compensation For Alan Pearson Compare With Other Companies In The Industry?

Our data indicates that TIL Logistics Group Limited has a market capitalization of NZ$95m, and total annual CEO compensation was reported as NZ$555k for the year to June 2020. That's a notable decrease of 17% on last year. In particular, the salary of NZ$501.5k, 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$277m, reported a median total CEO compensation of NZ$553k. So it looks like TIL Logistics Group compensates Alan Pearson in line with the median for the industry.

Talking in terms of the industry, salary represented approximately 91% of total compensation out of all the companies we analyzed, while other remuneration made up 9.3% of the pie. Although there is a difference in how total compensation is set, TIL Logistics Group more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at TIL Logistics Group Limited's Growth Numbers

Over the last three years, TIL Logistics Group Limited has shrunk its earnings per share by 34% per year. Its revenue is down 6.4% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has TIL Logistics Group Limited Been A Good Investment?

With a three year total loss of 48% for the shareholders, TIL Logistics Group Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we touched on above, TIL Logistics Group Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 5 warning signs (and 1 which is concerning) in TIL Logistics Group we think you should know about.

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.

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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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