This article will reflect on the compensation paid to Elias Hazouri who has served as CEO of HiTech Group Australia Limited (ASX:HIT) since 2016. This analysis will also assess whether HiTech Group Australia pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing HiTech Group Australia Limited's CEO Compensation With the industry
Our data indicates that HiTech Group Australia Limited has a market capitalization of AU$55m, and total annual CEO compensation was reported as AU$505k for the year to June 2020. We note that's an increase of 26% above last year. Notably, the salary which is AU$450.1k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below AU$273m, reported a median total CEO compensation of AU$445k. This suggests that HiTech Group Australia remunerates its CEO largely in line with the industry average. What's more, Elias Hazouri holds AU$9.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 73% of total compensation represents salary, while the remainder of 27% is other remuneration. HiTech Group Australia is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
HiTech Group Australia Limited's Growth
HiTech Group Australia Limited's earnings per share (EPS) grew 10% per year over the last three years. Its revenue is up 10% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has HiTech Group Australia Limited Been A Good Investment?
Most shareholders would probably be pleased with HiTech Group Australia Limited for providing a total return of 160% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Elias is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for HiTech Group Australia that investors should think about before committing capital to this stock.
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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