How Much Does Lindsay Australia's (ASX:LAU) CEO Make?

Michael Lindsay has been the CEO of Lindsay Australia Limited (ASX:LAU) since 2002, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Lindsay Australia pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Lindsay Australia

Comparing Lindsay Australia Limited's CEO Compensation With the industry

Our data indicates that Lindsay Australia Limited has a market capitalization of AU$105m, and total annual CEO compensation was reported as AU$1.2m for the year to June 2020. That's just a smallish increase of 5.3% on last year. In particular, the salary of AU$843.4k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$282m, reported a median total CEO compensation of AU$359k. Hence, we can conclude that Michael Lindsay is remunerated higher than the industry median. What's more, Michael Lindsay holds AU$4.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 51% of total compensation out of all the companies we analyzed, while other remuneration made up 49% of the pie. According to our research, Lindsay Australia has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Lindsay Australia Limited's Growth

Over the last three years, Lindsay Australia Limited has shrunk its earnings per share by 6.9% per year. Its revenue is up 6.5% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Lindsay Australia Limited Been A Good Investment?

With a three year total loss of 0.5% for the shareholders, Lindsay Australia Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Lindsay Australia pays its CEO higher than the norm for similar-sized companies belonging to the same industry. This doesn't look good against shareholder returns, which have been negative for the past three years. To make matters worse, EPS growth has also been negative during this period. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 4 warning signs for Lindsay Australia that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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