This article will reflect on the compensation paid to Oren Elkayam who has served as CEO of Mobilicom Limited (ASX:MOB) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Comparing Mobilicom Limited's CEO Compensation With the industry
According to our data, Mobilicom Limited has a market capitalization of AU$19m, and paid its CEO total annual compensation worth AU$637k over the year to December 2019. Notably, that's an increase of 32% over the year before. In particular, the salary of AU$390.2k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$282m, we found that the median total CEO compensation was AU$429k. This suggests that Oren Elkayam is paid more than the median for the industry. Moreover, Oren Elkayam also holds AU$2.8m worth of Mobilicom stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. There isn't a significant difference between Mobilicom and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Mobilicom Limited's Growth
Mobilicom Limited's earnings per share (EPS) grew 73% per year over the last three years. It saw its revenue drop 3.5% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in 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 Mobilicom Limited Been A Good Investment?
Given the total shareholder loss of 42% over three years, many shareholders in Mobilicom Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we noted earlier, Mobilicom pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we'd stop short of calling it inappropriate, we think Oren is earning a very handsome sum.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 4 warning signs for Mobilicom (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Mobilicom, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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