Some Shareholders May Object To A Pay Rise For Desane Group Holdings Limited's (ASX:DGH) CEO This Year
Key Insights
Desane Group Holdings to hold its Annual General Meeting on 24th of October
Total pay for CEO Felice Montrone includes AU$260.0k salary
Total compensation is 31% below industry average
Over the past three years, Desane Group Holdings' EPS fell by 16% and over the past three years, the total loss to shareholders 18%
The disappointing performance at Desane Group Holdings Limited (ASX:DGH) will make some shareholders rather disheartened. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 24th of October. From our analysis below, we think CEO compensation looks appropriate for now.
Check out our latest analysis for Desane Group Holdings
Comparing Desane Group Holdings Limited's CEO Compensation With The Industry
Our data indicates that Desane Group Holdings Limited has a market capitalization of AU$40m, and total annual CEO compensation was reported as AU$287k for the year to June 2023. Notably, that's an increase of 20% over the year before. We note that the salary portion, which stands at AU$260.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the Australian Real Estate industry with market capitalizations below AU$314m, we found that the median total CEO compensation was AU$415k. In other words, Desane Group Holdings pays its CEO lower than the industry median. Furthermore, Felice Montrone directly owns AU$14m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$260k | AU$217k | 91% |
Other | AU$27k | AU$22k | 9% |
Total Compensation | AU$287k | AU$239k | 100% |
Talking in terms of the industry, salary represented approximately 80% of total compensation out of all the companies we analyzed, while other remuneration made up 20% of the pie. Desane Group Holdings is paying a higher share of its remuneration through a salary in comparison to the overall 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.
A Look at Desane Group Holdings Limited's Growth Numbers
Over the last three years, Desane Group Holdings Limited has shrunk its earnings per share by 16% per year. It achieved revenue growth of 12% over the last year.
The decline in EPS is a bit concerning. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Desane Group Holdings Limited Been A Good Investment?
With a three year total loss of 18% for the shareholders, Desane Group Holdings Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 6 warning signs for Desane Group Holdings you should be aware of, and 2 of them are potentially serious.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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.
