Friedel Sass became the CEO of Bowler Metcalf Limited (JSE:BCF) in 2011, 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 assess whether Bowler Metcalf pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Friedel Sass Compare With Other Companies In The Industry?
According to our data, Bowler Metcalf Limited has a market capitalization of R730m, and paid its CEO total annual compensation worth R4.1m over the year to June 2020. We note that's a decrease of 12% compared to last year. We note that the salary portion, which stands at R3.32m constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below R2.9b, we found that the median total CEO compensation was R1.9m. Accordingly, our analysis reveals that Bowler Metcalf Limited pays Friedel Sass north of the industry median. Furthermore, Friedel Sass directly owns R5.7m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 82% of total compensation out of all the companies we analyzed, while other remuneration made up 18% of the pie. Bowler Metcalf is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Bowler Metcalf Limited's Growth
Bowler Metcalf Limited's earnings per share (EPS) grew 7.2% per year over the last three years. Its revenue is up 3.8% over the last year.
We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Bowler Metcalf Limited Been A Good Investment?
Most shareholders would probably be pleased with Bowler Metcalf Limited for providing a total return of 64% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Bowler Metcalf 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 shareholder returns have been positive for the last three years. That's why we were hoping EPS growth would match this growth, but sadly that is not the case. All things considered, we don't think there's a reason to criticize CEO compensation, though we hope Bowler Metcalf will post healthier EPS growth moving forward.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Bowler Metcalf that you should be aware of before investing.
Switching gears from Bowler Metcalf, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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