The CEO of Silex Systems Limited (ASX:SLX) is Michael Goldsworthy. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Michael Goldsworthy's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Silex Systems Limited has a market cap of AU$37m, and reported total annual CEO compensation of AU$558k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$522k. We took a group of companies with market capitalizations below AU$336m, and calculated the median CEO total compensation to be AU$399k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Silex Systems stands. On an industry level, roughly 57% of total compensation represents salary and 43% is other remuneration. It's interesting to note that Silex Systems pays out a greater portion of remuneration through salary, in comparison to the wider industry.
Thus we can conclude that Michael Goldsworthy receives more in total compensation than the median of a group of companies in the same market, and of similar size to Silex Systems Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at Silex Systems has changed from year to year.
Is Silex Systems Limited Growing?
On average over the last three years, Silex Systems Limited has seen earnings per share (EPS) move in a favourable direction by 28% each year (using a line of best fit). It saw its revenue drop 19% over the last year.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Silex Systems Limited Been A Good Investment?
Given the total loss of 62% over three years, many shareholders in Silex Systems Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Silex Systems Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. CEO compensation is an important area to keep your eyes on, but we've also identified 6 warning signs for Silex Systems (2 don't sit too well with us!) that you should be aware of before investing here.
If you want to buy a stock that is better than Silex Systems, this free list of high return, low debt companies is a great place to look.
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