It's Unlikely That Rectifier Technologies Limited's (ASX:RFT) CEO Will See A Huge Pay Rise This Year
Key Insights
Rectifier Technologies' Annual General Meeting to take place on 29th of November
Salary of AU$373.5k is part of CEO Yanbin Wang's total remuneration
The overall pay is 32% above the industry average
Rectifier Technologies' three-year loss to shareholders was 17% while its EPS grew by 52% over the past three years
The underwhelming share price performance of Rectifier Technologies Limited (ASX:RFT) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 29th of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Rectifier Technologies
How Does Total Compensation For Yanbin Wang Compare With Other Companies In The Industry?
According to our data, Rectifier Technologies Limited has a market capitalization of AU$47m, and paid its CEO total annual compensation worth AU$507k over the year to June 2023. Notably, that's an increase of 24% over the year before. We note that the salary portion, which stands at AU$373.5k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the Australia Electrical industry with market capitalizations below AU$305m, we found that the median total CEO compensation was AU$384k. Accordingly, our analysis reveals that Rectifier Technologies Limited pays Yanbin Wang north of the industry median. Furthermore, Yanbin Wang directly owns AU$1.0m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$374k | AU$321k | 74% |
Other | AU$133k | AU$87k | 26% |
Total Compensation | AU$507k | AU$407k | 100% |
On an industry level, roughly 72% of total compensation represents salary and 28% is other remuneration. Our data reveals that Rectifier Technologies allocates salary more or less in line with the wider market. 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 Rectifier Technologies Limited's Growth Numbers
Rectifier Technologies Limited's earnings per share (EPS) grew 52% per year over the last three years. In the last year, its revenue is up 167%.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Rectifier Technologies Limited Been A Good Investment?
Since shareholders would have lost about 17% over three years, some Rectifier Technologies Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for Rectifier Technologies you should be aware of, and 1 of them doesn't sit too well with us.
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.
