Tim Bartholomaeus became the CEO of Tamawood Limited (ASX:TWD) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Tamawood.
How Does Total Compensation For Tim Bartholomaeus Compare With Other Companies In The Industry?
According to our data, Tamawood Limited has a market capitalization of AU$86m, and paid its CEO total annual compensation worth AU$267k over the year to June 2020. We note that's a small decrease of 5.8% on last year. In particular, the salary of AU$194.1k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$285m, the reported median total CEO compensation was AU$651k. This suggests that Tim Bartholomaeus is paid below the industry median. What's more, Tim Bartholomaeus holds AU$1.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. There isn't a significant difference between Tamawood and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Tamawood Limited's Growth Numbers
Over the last three years, Tamawood Limited has shrunk its earnings per share by 23% per year. It saw its revenue drop 11% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Tamawood Limited Been A Good Investment?
Given the total shareholder loss of 6.9% over three years, many shareholders in Tamawood Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we touched on above, Tamawood Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. It's tough to say that Tim is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for Tamawood (1 is concerning!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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