The performance at Data#3 Limited (ASX:DTL) has been quite strong recently and CEO Laurence Baynham has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 28 October 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for Data#3

How Does Total Compensation For Laurence Baynham Compare With Other Companies In The Industry?

At the time of writing, our data shows that Data#3 Limited has a market capitalization of AU$852m, and reported total annual CEO compensation of AU$1.0m for the year to June 2021. Notably, that's a decrease of 8.9% over the year before. We note that the salary of AU$531.0k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations ranging from AU$534m to AU$2.1b, the reported median CEO total compensation was AU$1.4m. This suggests that Data#3 remunerates its CEO largely in line with the industry average. Furthermore, Laurence Baynham directly owns AU$1.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component 2021 2020 Proportion (2021) Salary AU$531k AU$531k 51% Other AU$503k AU$604k 49% Total Compensation AU$1.0m AU$1.1m 100%

Talking in terms of the industry, salary represented approximately 44% of total compensation out of all the companies we analyzed, while other remuneration made up 56% of the pie. It's interesting to note that Data#3 pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

 ceo-compensation

Data#3 Limited's Growth

Data#3 Limited has seen its earnings per share (EPS) increase by 22% a year over the past three years. It achieved revenue growth of 20% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Data#3 Limited Been A Good Investment?

Most shareholders would probably be pleased with Data#3 Limited for providing a total return of 318% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Data#3 that you should be aware of before investing.

Important note: Data#3 is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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