Yahoo Finance Pointerra Limited's (ASX:3DP) CEO Might Not Expect Shareholders To Be So Generous This Year
Key Insights
Pointerra to hold its Annual General Meeting on 22nd of November
Salary of AU$375.0k is part of CEO Ian Olson's total remuneration
Total compensation is similar to the industry average
Pointerra's three-year loss to shareholders was 88% while its EPS was down 20% over the past three years
The results at Pointerra Limited (ASX:3DP) have been quite disappointing recently and CEO Ian Olson bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 22nd of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.
View our latest analysis for Pointerra
Comparing Pointerra Limited's CEO Compensation With The Industry
According to our data, Pointerra Limited has a market capitalization of AU$39m, and paid its CEO total annual compensation worth AU$450k over the year to June 2023. That's a notable decrease of 8.5% on last year. In particular, the salary of AU$375.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the Australian Software industry with market capitalizations below AU$306m, reported a median total CEO compensation of AU$502k. So it looks like Pointerra compensates Ian Olson in line with the median for the industry. Furthermore, Ian Olson directly owns AU$2.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$375k | AU$375k | 83% |
Other | AU$75k | AU$117k | 17% |
Total Compensation | AU$450k | AU$492k | 100% |
Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. It's interesting to note that Pointerra pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Pointerra Limited's Growth
Over the last three years, Pointerra Limited has shrunk its earnings per share by 20% per year. In the last year, its revenue is down 25%.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Pointerra Limited Been A Good Investment?
With a total shareholder return of -88% over three years, Pointerra Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 6 warning signs for Pointerra (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
