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Is Uscom Limited's (ASX:UCM) CEO Being Overpaid?

The CEO of Uscom Limited (ASX:UCM) is Rob Phillips. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Uscom

How Does Rob Phillips's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Uscom Limited has a market cap of AU$18m, and reported total annual CEO compensation of AU$251k for the year to June 2019. It is worth noting that the CEO compensation consists almost entirely of the salary, worth AU$240k. We took a group of companies with market capitalizations below AU$292m, and calculated the median CEO total compensation to be AU$381k.

Most shareholders would consider it a positive that Rob Phillips takes less total compensation than the CEOs of most similar size companies, leaving more 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, below, how CEO compensation at Uscom has changed over time.

ASX:UCM CEO Compensation, January 24th 2020
ASX:UCM CEO Compensation, January 24th 2020

Is Uscom Limited Growing?

On average over the last three years, Uscom Limited has grown earnings per share (EPS) by 20% each year (using a line of best fit). It achieved revenue growth of 27% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Uscom Limited Been A Good Investment?

With a three year total loss of 51%, Uscom Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It looks like Uscom Limited pays its CEO less than similar sized companies.

Since the business is growing, many would argue this suggests the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we would not say that Rob Phillips is generously paid, it would be good to see an improvement in business performance before too an increase in pay. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. Shareholders may want to check for free if Uscom insiders are buying or selling shares.

Important note: Uscom 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.

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.

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. Thank you for reading.