Is Shine Corporate Ltd's (ASX:SHJ) CEO Being Overpaid?

Simon Morrison has been the CEO of Shine Corporate Ltd (ASX:SHJ) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Shine

How Does Simon Morrison's Compensation Compare With Similar Sized Companies?

Our data indicates that Shine Corporate Ltd is worth AU$157m, and total annual CEO compensation was reported as AU$556k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$489k. We looked at a group of companies with market capitalizations under AU$300m, and the median CEO total compensation was AU$379k.

It would therefore appear that Shine Corporate Ltd pays Simon Morrison 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Shine has changed from year to year.

Is Shine Corporate Ltd Growing?

Shine Corporate Ltd has reduced its earnings per share by an average of 5.2% a year, over the last three years (measured with a line of best fit). Revenue was pretty flat on last year.

Unfortunately, earnings per share have trended lower over the last three years. And the flat revenue is seriously uninspiring. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Shine Corporate Ltd Been A Good Investment?

Boasting a total shareholder return of 49% over three years, Shine Corporate Ltd has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at Shine Corporate Ltd with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

We think many shareholders would be underwhelmed with the business growth over the last three years. On the other hand, returns have been good, so the company is doing something right. Considering this, shareholders are probably not too worried about the CEO compensation. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Shine (free visualization of insider trades).

If you want to buy a stock that is better than Shine, this free list of high return, low debt companies is a great place to look.

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.