The CEO of Zip Co Limited (ASX:Z1P) is Larry Diamond, 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.
Check out our latest analysis for Zip Co
How Does Total Compensation For Larry Diamond Compare With Other Companies In The Industry?
At the time of writing, our data shows that Zip Co Limited has a market capitalization of AU$3.1b, and reported total annual CEO compensation of AU$820k for the year to June 2020. That's a notable increase of 39% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$401k.
For comparison, other companies in the same industry with market capitalizations ranging between AU$1.4b and AU$4.4b had a median total CEO compensation of AU$1.3m. This suggests that Larry Diamond is paid below the industry median. Moreover, Larry Diamond also holds AU$331m worth of Zip Co stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$401k | AU$350k | 49% |
| Other | AU$419k | AU$240k | 51% |
| Total Compensation | AU$820k | AU$590k | 100% |
Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. According to our research, Zip Co has allocated a higher percentage of pay to salary in comparison to the wider industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Zip Co Limited's Growth Numbers
Zip Co Limited has seen its earnings per share (EPS) increase by 16% a year over the past three years. Its revenue is up 91% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Zip Co Limited Been A Good Investment?
We think that the total shareholder return of 764%, over three years, would leave most Zip Co Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.