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Leigh Travers has been the CEO of DigitalX Limited (ASX:DCC) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Leigh Travers's Compensation Compare With Similar Sized Companies?
According to our data, DigitalX Limited has a market capitalization of AU$36m, and pays its CEO total annual compensation worth US$918k. (This figure is for the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at US$134k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$248k.
Thus we can conclude that Leigh Travers receives more in total compensation than the median of a group of companies in the same market, and of similar size to DigitalX Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at DigitalX has changed from year to year.
Is DigitalX Limited Growing?
DigitalX Limited has increased its earnings per share (EPS) by an average of 39% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 53%.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has DigitalX Limited Been A Good Investment?
Given the total loss of 52% over three years, many shareholders in DigitalX Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We examined the amount DigitalX Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.