Peter De Leo became the CEO of Lycopodium Limited (ASX:LYL) in 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
How Does Peter De Leo's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Lycopodium Limited has a market cap of AU$227m, and reported total annual CEO compensation of AU$633k for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$565k. We looked at a group of companies with market capitalizations from AU$151m to AU$606m, and the median CEO total compensation was AU$722k.
So Peter De Leo receives a similar amount to the median CEO pay, amongst the companies we looked at. 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 Lycopodium has changed over time.
Is Lycopodium Limited Growing?
Over the last three years Lycopodium Limited has grown its earnings per share (EPS) by an average of 41% per year (using a line of best fit). It saw its revenue drop 21% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.
Has Lycopodium Limited Been A Good Investment?
Boasting a total shareholder return of 119% over three years, Lycopodium Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Peter De Leo is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling Lycopodium shares (free trial).
Important note: Lycopodium may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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