Is Skyfii Limited (ASX:SKF) Overpaying Its CEO?
The CEO of Skyfii Limited (ASX:SKF) is Wayne Arthur. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Skyfii
How Does Wayne Arthur's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Skyfii Limited has a market cap of AU$58m, and reported total annual CEO compensation of AU$503k for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$233k. We looked at a group of companies with market capitalizations under AU$291m, and the median CEO total compensation was AU$380k.
It would therefore appear that Skyfii Limited pays Wayne Arthur more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration 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 Skyfii has changed from year to year.
Is Skyfii Limited Growing?
On average over the last three years, Skyfii Limited has grown earnings per share (EPS) by 59% each year (using a line of best fit). Its revenue is up 50% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has Skyfii Limited Been A Good Investment?
I think that the total shareholder return of 150%, over three years, would leave most Skyfii Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We examined the amount Skyfii Limited pays its CEO, and compared it to the amount paid by similar sized companies. 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. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Skyfii.
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.
