This article will reflect on the compensation paid to Angus G. Benbow who has served as CEO of Centrepoint Alliance Limited (ASX:CAF) since 2018. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Centrepoint Alliance
How Does Total Compensation For Angus G. Benbow Compare With Other Companies In The Industry?
At the time of writing, our data shows that Centrepoint Alliance Limited has a market capitalization of AU$25m, and reported total annual CEO compensation of AU$701k for the year to June 2020. We note that's a decrease of 10% compared to last year. Notably, the salary which is AU$430.2k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under AU$284m, the reported median total CEO compensation was AU$539k. This suggests that Centrepoint Alliance remunerates its CEO largely in line with the industry average. What's more, Angus G. Benbow holds AU$198k worth of shares in the company in their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$430k | AU$454k | 61% |
Other | AU$271k | AU$326k | 39% |
Total Compensation | AU$701k | AU$780k | 100% |
On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. Our data reveals that Centrepoint Alliance allocates salary more or less in line with the wider market. 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.
Centrepoint Alliance Limited's Growth
Over the last three years, Centrepoint Alliance Limited has shrunk its earnings per share by 19% per year. In the last year, its revenue is up 11%.
Few shareholders would be pleased to read that EPS have declined. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. 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 Centrepoint Alliance Limited Been A Good Investment?
Since shareholders would have lost about 72% over three years, some Centrepoint Alliance Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Centrepoint Alliance pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over 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 3 warning signs (and 1 which doesn't sit too well with us) in Centrepoint Alliance we think you should know about.
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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
