Is IMF Bentham Limited's (ASX:IMF) CEO Overpaid Relative To Its Peers?

Andrew Saker has been the CEO of IMF Bentham Limited (ASX:IMF) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for IMF Bentham

How Does Andrew Saker's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that IMF Bentham Limited has a market cap of AU$538m, and is paying total annual CEO compensation of AU$1.8m. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$1.2m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$278m to AU$1.1b. The median total CEO compensation was AU$1.0m.

Thus we can conclude that Andrew Saker receives more in total compensation than the median of a group of companies in the same market, and of similar size to IMF Bentham Limited. However, this doesn't necessarily mean the pay is too high. 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 IMF Bentham has changed over time.

Is IMF Bentham Limited Growing?

IMF Bentham Limited has reduced its earnings per share by an average of 68% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -54%.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has IMF Bentham Limited Been A Good Investment?

Most shareholders would probably be pleased with IMF Bentham Limited for providing a total return of 98% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

We compared the total CEO remuneration paid by IMF Bentham Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

But clearly there are some positives, because investors have done well over the same time frame. Considering this, shareholders are probably not too worried about the CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling IMF Bentham shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.