Is Clover Corporation Limited's (ASX:CLV) CEO Being Overpaid?

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Peter Davey has been the CEO of Clover Corporation Limited (ASX:CLV) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Clover

How Does Peter Davey's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Clover Corporation Limited has a market cap of AU$339m, and is paying total annual CEO compensation of AU$1.2m. (This figure is for the year to July 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$394k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$144m to AU$578m. The median total CEO compensation was AU$748k.

As you can see, Peter Davey is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Clover Corporation Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Clover has changed over time.

ASX:CLV CEO Compensation, June 23rd 2019
ASX:CLV CEO Compensation, June 23rd 2019

Is Clover Corporation Limited Growing?

Clover Corporation Limited has increased its earnings per share (EPS) by an average of 65% a year, over the last three years (using a line of best fit). Its revenue is up 11% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Clover Corporation Limited Been A Good Investment?

Boasting a total shareholder return of 442% over three years, Clover Corporation Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

We examined the amount Clover Corporation Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Clover.

Important note: Clover may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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.

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