Yahoo Finance Is Norwood Systems Limited (ASX:NOR) Overpaying Its CEO?
The CEO of Norwood Systems Limited (ASX:NOR) is Paul Ostergaard. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Norwood Systems
How Does Paul Ostergaard's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Norwood Systems Limited has a market cap of AU$8.7m, and reported total annual CEO compensation of AU$376k for the year to June 2018. While we always look at total compensation first, we note that the salary component is less, at AU$286k. We examined a group of similar sized companies, with market capitalizations of below AU$293m. The median CEO total compensation in that group is AU$378k.
So Paul Ostergaard is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Norwood Systems has changed over time.
Is Norwood Systems Limited Growing?
Over the last three years Norwood Systems Limited has grown its earnings per share (EPS) by an average of 72% per year (using a line of best fit). It achieved revenue growth of 60% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Norwood Systems Limited Been A Good Investment?
Given the total loss of 90% over three years, many shareholders in Norwood Systems Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Remuneration for Paul Ostergaard is close enough to the median pay for a CEO of a similar sized company .
We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Norwood Systems (free visualization of insider trades).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
