In This Article:
This article will reflect on the compensation paid to Darren Pateman who has served as CEO of Finbar Group Limited (ASX:FRI) since 2010. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Finbar Group
How Does Total Compensation For Darren Pateman Compare With Other Companies In The Industry?
At the time of writing, our data shows that Finbar Group Limited has a market capitalization of AU$178m, and reported total annual CEO compensation of AU$926k for the year to June 2020. That's a slightly lower by 5.5% over the previous year. Notably, the salary which is AU$668.9k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under AU$277m, the reported median total CEO compensation was AU$564k. This suggests that Darren Pateman is paid more than the median for the industry. Furthermore, Darren Pateman directly owns AU$2.4m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$669k | AU$670k | 72% |
| Other | AU$257k | AU$311k | 28% |
| Total Compensation | AU$926k | AU$980k | 100% |
On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. Although there is a difference in how total compensation is set, Finbar 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.
Finbar Group Limited's Growth
Finbar Group Limited's earnings per share (EPS) grew 2.0% per year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPSgrowth gives us some relief. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Finbar Group Limited Been A Good Investment?
With a three year total loss of 5.5% for the shareholders, Finbar Group Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As we noted earlier, Finbar Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Over the last three years, shareholder returns have been downright disappointing for Finbar Group, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look great when you consider Darren is taking home compensation north of the industry average. All things considered, we believe shareholders would be disappointed to see Darren's compensation grow without first seeing an improvement in the performance of the company.