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We have been pretty impressed with the performance at Seeing Machines Limited (LON:SEE) recently and CEO Paul McGlone deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 16 December 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.
How Does Total Compensation For Paul McGlone Compare With Other Companies In The Industry?
According to our data, Seeing Machines Limited has a market capitalization of UK£434m, and paid its CEO total annual compensation worth AU$1.1m over the year to June 2021. Notably, that's a decrease of 13% over the year before. We note that the salary portion, which stands at AU$705.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations ranging from UK£151m to UK£605m, the reported median CEO total compensation was AU$866k. So it looks like Seeing Machines compensates Paul McGlone in line with the median for the industry.
Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. Seeing Machines pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Seeing Machines Limited's Growth
Seeing Machines Limited's earnings per share (EPS) grew 35% per year over the last three years. Its revenue is up 18% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Seeing Machines Limited Been A Good Investment?
Boasting a total shareholder return of 167% over three years, Seeing Machines Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Seeing Machines that investors should be aware of in a dynamic business environment.
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. 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.