We Think Senetas Corporation Limited's (ASX:SEN) CEO Compensation Package Needs To Be Put Under A Microscope
Senetas Corporation Limited (ASX:SEN) has not performed well recently and CEO Andrew Wilson will probably need to up their game. At the upcoming AGM on 18 November 2022, shareholders can hear from the board including their plans for turning around performance. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.
Check out our latest analysis for Senetas
How Does Total Compensation For Andrew Wilson Compare With Other Companies In The Industry?
Our data indicates that Senetas Corporation Limited has a market capitalization of AU$52m, and total annual CEO compensation was reported as AU$540k for the year to June 2022. Notably, that's an increase of 16% over the year before. In particular, the salary of AU$461.4k, 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 AU$304m, reported a median total CEO compensation of AU$508k. From this we gather that Andrew Wilson is paid around the median for CEOs in the industry.
Component | 2022 | 2021 | Proportion (2022) |
Salary | AU$461k | AU$418k | 85% |
Other | AU$79k | AU$49k | 15% |
Total Compensation | AU$540k | AU$467k | 100% |
Speaking on an industry level, nearly 48% of total compensation represents salary, while the remainder of 52% is other remuneration. According to our research, Senetas has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.
Senetas Corporation Limited's Growth
Senetas Corporation Limited has reduced its earnings per share by 93% a year over the last three years. Its revenue is up 9.1% over the last year.
The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Senetas Corporation Limited Been A Good Investment?
Few Senetas Corporation Limited shareholders would feel satisfied with the return of -39% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Senetas we think you should know about.
Switching gears from Senetas, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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