In the past three years, shareholders of ClearView Wealth Limited (ASX:CVW) have seen a loss on their investment. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 09 November 2022 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for ClearView Wealth

How Does Total Compensation For Simon Swanson Compare With Other Companies In The Industry?

Our data indicates that ClearView Wealth Limited has a market capitalization of AU$321m, and total annual CEO compensation was reported as AU$1.2m for the year to June 2022. Notably, that's an increase of 13% over the year before. We note that the salary of AU$701.9k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between AU$156m and AU$624m had a median total CEO compensation of AU$951k. This suggests that ClearView Wealth remunerates its CEO largely in line with the industry average. Furthermore, Simon Swanson directly owns AU$7.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component 2022 2021 Proportion (2022) Salary AU$702k AU$681k 60% Other AU$475k AU$361k 40% Total Compensation AU$1.2m AU$1.0m 100%

On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Although there is a difference in how total compensation is set, ClearView Wealth more or less reflects the market in terms of setting the salary. 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

ClearView Wealth Limited's Growth

ClearView Wealth Limited has seen its earnings per share (EPS) increase by 38% a year over the past three years. Its revenue is down 79% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 ClearView Wealth Limited Been A Good Investment?

Since shareholders would have lost about 14% over three years, some ClearView Wealth Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. 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. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 2 warning signs for ClearView Wealth (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this freelist of interesting companies that have HIGH return on equity and low debt.

Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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