Does DomaCom Limited's (ASX:DCL) CEO Pay Matter?
Arthur Naoumidis is the CEO of DomaCom Limited (ASX:DCL). 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for DomaCom
How Does Arthur Naoumidis's Compensation Compare With Similar Sized Companies?
Our data indicates that DomaCom Limited is worth AU$16m, and total annual CEO compensation was reported as AU$185k for the year to June 2019. That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at AU$164k. We examined a group of similar sized companies, with market capitalizations of below AU$292m. The median CEO total compensation in that group is AU$373k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see a visual representation of the CEO compensation at DomaCom, below.
Is DomaCom Limited Growing?
DomaCom Limited has increased its earnings per share (EPS) by an average of 12% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 54%.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has DomaCom Limited Been A Good Investment?
Given the total loss of 69% over three years, many shareholders in DomaCom Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
It looks like DomaCom Limited pays its CEO less than similar sized companies.
Many would consider this to indicate that the pay is modest since the business is growing. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Arthur Naoumidis is generously paid, it would be good to see an improvement in business performance before too an increase in pay. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. So you may want to check if insiders are buying DomaCom shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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