Yahoo Finance Does Norwood Systems' (ASX:NOR) CEO Salary Compare Well With Industry Peers?
Paul Ostergaard is the CEO of Norwood Systems Limited (ASX:NOR), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Norwood Systems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Norwood Systems
Comparing Norwood Systems Limited's CEO Compensation With the industry
At the time of writing, our data shows that Norwood Systems Limited has a market capitalization of AU$8.9m, and reported total annual CEO compensation of AU$294k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of AU$268.1k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$275m, we found that the median total CEO compensation was AU$335k. So it looks like Norwood Systems compensates Paul Ostergaard in line with the median for the industry. Furthermore, Paul Ostergaard directly owns AU$536k worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$268k | AU$270k | 91% |
Other | AU$25k | AU$26k | 9% |
Total Compensation | AU$294k | AU$295k | 100% |
On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. Norwood Systems is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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 Norwood Systems Limited's Growth Numbers
Norwood Systems Limited's earnings per share (EPS) grew 60% per year over the last three years. It achieved revenue growth of 64% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Norwood Systems Limited Been A Good Investment?
With a three year total loss of 84% for the shareholders, Norwood Systems Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As previously discussed, Paul is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Paul is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for Norwood Systems (3 are potentially serious!) that you should be aware of before investing here.
Switching gears from Norwood Systems, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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