The CEO of Navigator Global Investments Limited (ASX:NGI) is Sean McGould, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Navigator Global Investments Limited's CEO Compensation With the industry
According to our data, Navigator Global Investments Limited has a market capitalization of AU$255m, and paid its CEO total annual compensation worth US$689k over the year to June 2020. We note that's a decrease of 50% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$250k.
On examining similar-sized companies in the industry with market capitalizations between AU$141m and AU$562m, we discovered that the median CEO total compensation of that group was US$590k. So it looks like Navigator Global Investments compensates Sean McGould in line with the median for the industry. What's more, Sean McGould holds AU$31m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. Navigator Global Investments sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Navigator Global Investments Limited's Growth
Navigator Global Investments Limited saw earnings per share stay pretty flat over the last three years. Its revenue is down 13% over the previous year.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Navigator Global Investments Limited Been A Good Investment?
With a three year total loss of 37% for the shareholders, Navigator Global Investments Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Sean is compensated close to the median for companies of its size, and which belong to the same industry. But with negative shareholder returns and unimpressive EPS growth, shareholders will surely be disturbed. CEO pay isn't exceptionally high, but considering poor performance, shareholders will likely hold off support for a raise until results improve.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Navigator Global Investments that investors should look into moving forward.
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.
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. 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.
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