Is Skin Elements Limited's (ASX:SKN) CEO Paid Enough Relative To Peers?
The CEO of Skin Elements Limited (ASX:SKN) is Peter Malone. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Skin Elements
How Does Peter Malone's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Skin Elements Limited has a market cap of AU$2.9m, and reported total annual CEO compensation of AU$328k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at . We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined a group of similar sized companies, with market capitalizations of below AU$291m. The median CEO total compensation in that group is AU$380k.
That means Peter Malone receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Skin Elements has changed over time.
Is Skin Elements Limited Growing?
Over the last three years Skin Elements Limited has shrunk its earnings per share by an average of 28% per year (measured with a line of best fit). In the last year, its revenue is down 4.8%.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Skin Elements Limited Been A Good Investment?
With a three year total loss of 91%, Skin Elements Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Peter Malone is paid around what is normal the leaders of comparable size companies.
Returns have been disappointing and the company is not growing its earnings per share. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Skin Elements (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
