Here's Why Wrkr Ltd's (ASX:WRK) CEO Compensation Is The Least Of Shareholders Concerns

Key Insights

• Wrkr to hold its Annual General Meeting on 16th of November

• Total pay for CEO Trent Lund includes AU$289.3k salary

• The overall pay is 35% below the industry average

• Over the past three years, Wrkr's EPS grew by 45% and over the past three years, the total loss to shareholders 19%

Shareholders may be wondering what CEO Trent Lund plans to do to improve the less than great performance at Wrkr Ltd (ASX:WRK) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 16th of November. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Wrkr

How Does Total Compensation For Trent Lund Compare With Other Companies In The Industry?

Our data indicates that Wrkr Ltd has a market capitalization of AU$32m, and total annual CEO compensation was reported as AU$333k for the year to June 2023. We note that's an increase of 14% above last year. We note that the salary portion, which stands at AU$289.3k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Australian IT industry with market capitalizations below AU$313m, reported a median total CEO compensation of AU$514k. That is to say, Trent Lund is paid under the industry median.

Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. Wrkr 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.

Wrkr Ltd's Growth

Wrkr Ltd has seen its earnings per share (EPS) increase by 45% a year over the past three years. In the last year, its revenue is up 43%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Wrkr Ltd Been A Good Investment?

Given the total shareholder loss of 19% over three years, many shareholders in Wrkr Ltd are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders have earned a negative share price return is certainly disconcerting. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

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 3 warning signs for Wrkr that you should be aware of before investing.

Important note: Wrkr 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.

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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.