Sean Smith became the CEO of Frugl Group Limited (ASX:FGL) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Frugl Group.
See our latest analysis for Frugl Group
Comparing Frugl Group Limited's CEO Compensation With the industry
Our data indicates that Frugl Group Limited has a market capitalization of AU$4.5m, and total annual CEO compensation was reported as AU$357k for the year to June 2020. That's a notable decrease of 31% on last year. We note that the salary portion, which stands at AU$260.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$279m, the reported median total CEO compensation was AU$331k. So it looks like Frugl Group compensates Sean Smith in line with the median for the industry.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$260k | AU$247k | 73% |
| Other | AU$97k | AU$268k | 27% |
| Total Compensation | AU$357k | AU$515k | 100% |
Speaking on an industry level, nearly 60% of total compensation represents salary, while the remainder of 40% is other remuneration. Frugl Group pays out 73% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Frugl Group Limited's Growth
Frugl Group Limited's earnings per share (EPS) grew 72% per year over the last three years. It saw its revenue drop 47% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Frugl Group Limited Been A Good Investment?
With a three year total loss of 93% for the shareholders, Frugl Group Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Frugl Group pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, EPS growth is positive over the same time frame. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.