Sims Limited (ASX: SGM) CEO compensation seems a bit stretched at the moment


Under the leadership of CEO Alistair Field, Sims Limited (ASX: SGM) has done quite well recently. This is something shareholders will keep in mind when voting on company resolutions such as executive compensation at the upcoming AGM on November 9, 2021. However, some shareholders may still be hesitant to be too generous with CEO compensation.

See our latest review for The Sims

Comparison of Sims Limited CEO Compensation with Industry

According to our data, Sims Limited has a market capitalization of A $ 2.8 billion and paid its CEO a total annual compensation of A $ 7.9 million in the year until June 2021. It s This includes an 87% increase over the previous year. While we always look at total compensation first, our analysis shows that the salary component is smaller, at A $ 1.7 million.

For comparison, other companies in the same industry with market caps between A $ 1.3 billion and A $ 4.3 billion had a median total CEO compensation of A $ 1.5 million. This suggests that Alistair Field is paid more than the industry median. In addition, Alistair Field directly owns AU $ 3.3 million in shares of the company.

Making up

2021

2020

Proportion (2021)

Salary

1.7 million Australian dollars

1.8 million Australian dollars

22%

Other

6.2 million Australian dollars

AU $ 2.5 million

78%

Total compensation

AU $ 7.9 million

4.2 million Australian dollars

100%

At the industry level, approximately 59% of total compensation is salary and 41% is other compensation. Sims pays a modest bracket of pay through salary, compared to the industry as a whole. If the total compensation is oriented towards non-salary benefits, this indicates that the CEO’s compensation is linked to the performance of the company.

CEO-compensation

A look at the growth numbers from Sims Limited

Over the past three years, Sims Limited has seen its earnings per share (EPS) increase by 4.7% per year. It achieved 21% revenue growth compared to last year.

This revenue growth could really point to a brighter future. And the improvement in EPS is modest but respectable. Although we stop before calling the stock one of the top performers, we believe the company has potential. Historical performance can sometimes be a good indicator of what happens next, but if you want to take a look at the future of the business, this might be of interest to you. free viewing analyst forecasts.

Has Sims Limited been a good investment?

Sims Limited has served shareholders reasonably well, earning an 18% three-year total return. But they probably don’t want the CEO to be paid more than normal for companies of the same size.

To conclude…

The decent performance of the company could have pleased most shareholders, perhaps making CEO compensation the least of the concerns to be discussed at the next AGM. However, if the board proposes to increase compensation, some shareholders might have questions given that the CEO is already paid more than the industry.

CEO compensation is just one of the many factors that should be taken into account when reviewing company performance. We did our research and identified 2 warning signs (and 1 that can’t be ignored) in Sims, we think you should be aware.

Important note: Sims is exciting stock, but we understand that investors can look for an unencumbered balance sheet and successful returns. You might find something better in this list of interesting companies with high ROE and low leverage.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

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