Yahoo Finance Why TIL Logistics Group's (NZSE:TLL) CEO Pay Matters
This article will reflect on the compensation paid to Alan Pearson who has served as CEO of TIL Logistics Group Limited (NZSE:TLL) since 2018. This analysis will also assess whether TIL Logistics Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for TIL Logistics Group
How Does Total Compensation For Alan Pearson Compare With Other Companies In The Industry?
Our data indicates that TIL Logistics Group Limited has a market capitalization of NZ$98m, and total annual CEO compensation was reported as NZ$555k for the year to June 2020. Notably, that's a decrease of 17% over the year before. In particular, the salary of NZ$501.5k, 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 NZ$278m, reported a median total CEO compensation of NZ$555k. This suggests that TIL Logistics Group remunerates its CEO largely in line with the industry average.
Component | 2020 | 2019 | Proportion (2020) |
Salary | NZ$502k | NZ$440k | 90% |
Other | NZ$53k | NZ$230k | 10% |
Total Compensation | NZ$555k | NZ$670k | 100% |
Speaking on an industry level, nearly 91% of total compensation represents salary, while the remainder of 9.3% is other remuneration. Although there is a difference in how total compensation is set, TIL Logistics Group more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at TIL Logistics Group Limited's Growth Numbers
Over the last three years, TIL Logistics Group Limited has shrunk its earnings per share by 34% per year. It saw its revenue drop 6.4% over the last year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has TIL Logistics Group Limited Been A Good Investment?
Given the total shareholder loss of 41% over three years, many shareholders in TIL Logistics Group 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...
As we touched on above, TIL Logistics Group Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 1 which doesn't sit too well with us) in TIL Logistics Group we think you should know about.
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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