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The solid performance at Technology One Limited (ASX:TNE) has been impressive and shareholders will probably be pleased to know that CEO Edward Chung has delivered. At the upcoming AGM on 22 February 2023, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.
See our latest analysis for Technology One
Comparing Technology One Limited's CEO Compensation With The Industry
According to our data, Technology One Limited has a market capitalization of AU$4.7b, and paid its CEO total annual compensation worth AU$2.3m over the year to September 2022. We note that's an increase of 18% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$513k.
On comparing similar companies from the Australian Software industry with market caps ranging from AU$2.9b to AU$9.2b, we found that the median CEO total compensation was AU$8.4m. In other words, Technology One pays its CEO lower than the industry median. Furthermore, Edward Chung directly owns AU$13m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2022 | 2021 | Proportion (2022) |
| Salary | AU$513k | AU$506k | 22% |
| Other | AU$1.8m | AU$1.4m | 78% |
| Total Compensation | AU$2.3m | AU$1.9m | 100% |
Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. Technology One sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Technology One Limited's Growth
Technology One Limited has seen its earnings per share (EPS) increase by 14% a year over the past three years. Its revenue is up 18% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Technology One Limited Been A Good Investment?
Most shareholders would probably be pleased with Technology One Limited for providing a total return of 78% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.