Css attributes

The CEO of Clean Seas Seafood Limited (ASX:CSS) is unlikely to see a huge pay rise this year

Disappointing share price performance Clean Seas Seafood Limited (ASX:CSS) over the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the stock price has deviated from fundamentals. Shareholders may want to ask the board about the future direction of the company at the next annual general meeting on October 28, 2022. Voting on resolutions such as executive compensation and other matters could also be a means of influencing management. We explain below why we think shareholders should be cautious about approving a raise for the CEO at this time.

Check opportunities and risks within the AU food industry.

How does Rob Gratton’s total compensation compare to other companies in the industry?

Our data indicates that Clean Seas Seafood Limited has a market capitalization of A$89 million and the CEO’s total annual compensation was A$715,000 for the year to June 2022. These include a 48% increase over the previous year. In particular, the salary of AU$428,500 is quite a significant portion of the total compensation paid to the CEO.

For comparison, other companies in the industry with a market capitalization below AU$316 million reported a median total CEO compensation of AU$361,000. Therefore, we can conclude that Rob Gratton is paid better than the industry median. Additionally, Rob Gratton also owns shares of Clean Seas Seafood worth A$244,000 directly under his own name.

Making up 2022 2021 Percentage (2022)
Salary AU$428,000 AU$382,000 60%
Other AU$287,000 AU$101,000 40%
The total compensation AU$715,000 AU$483,000 100%

At the industry level, approximately 73% of total compensation represents wages and 27% other compensation. In the case of Clean Seas Seafood, non-wage compensation represents a larger share of total compensation, compared to the industry as a whole. If the total remuneration is oriented towards the salary, this suggests that the variable part, generally linked to performance, is lower.

ASX: CSS CEO Compensation October 21, 2022

A look at Clean Seas Seafood Limited’s growth figures

Clean Seas Seafood Limited has seen its earnings per share (EPS) increase by 45% annually over the past three years. It achieved a growth in turnover of 37% compared to last year.

This demonstrates that the company has recently improved and is good news for shareholders. The combination of strong revenue growth and improving mid-term EPS certainly indicates the kind of growth we like to see. Stepping away from the current form for a second, it might be worth checking out this free visual representation of what analysts expect for the future.

Was Clean Seas Seafood Limited a good investment?

The -36% return over three years would not have pleased the shareholders of Clean Seas Seafood Limited. Shareholders would therefore likely want the company to be less generous with CEO compensation.

In summary…

Despite its earnings growth, the decline in the share price over the past three years is certainly concerning. The fact that the stock price has not risen with earnings may indicate that other issues may be affecting that stock. Shareholders would likely be keen to know what other factors might weigh on the stock. The next general meeting will be an opportunity for shareholders to question the board on key topics, such as CEO compensation or any other issues they may have and to review their investment thesis regarding the company.

CEO compensation is an important area to watch, but we also need to pay attention to other attributes of the business. In our study, we found 2 warning signs for Clean Seas Seafood you should be aware, and one of them is concerning.

Sure, you might find a fantastic investment by looking at a different set of stocks. So take a look at this free list of interesting companies.

Valuation is complex, but we help make it simple.

Find out if Clean seafood is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.