Most Shareholders Will Probably Agree With Norwood Systems Limited's (ASX:NOR) CEO Compensation
Key Insights
Norwood Systems' Annual General Meeting to take place on 19th of December
Total pay for CEO Paul Ostergaard includes AU$288.9k salary
The overall pay is comparable to the industry average
Norwood Systems' EPS grew by 9.7% over the past three years while total shareholder return over the past three years was 71%
Under the guidance of CEO Paul Ostergaard, Norwood Systems Limited (ASX:NOR) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 19th of December. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.
Check out our latest analysis for Norwood Systems
Comparing Norwood Systems Limited's CEO Compensation With The Industry
According to our data, Norwood Systems Limited has a market capitalization of AU$18m, and paid its CEO total annual compensation worth AU$451k over the year to June 2023. Notably, that's an increase of 74% over the year before. Notably, the salary which is AU$288.9k, represents most of the total compensation being paid.
On comparing similar-sized companies in the Australian Software industry with market capitalizations below AU$304m, we found that the median total CEO compensation was AU$497k. From this we gather that Paul Ostergaard is paid around the median for CEOs in the industry. Moreover, Paul Ostergaard also holds AU$1.2m worth of Norwood Systems stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$289k | AU$236k | 64% |
Other | AU$162k | AU$24k | 36% |
Total Compensation | AU$451k | AU$260k | 100% |
On an industry level, around 57% of total compensation represents salary and 43% is other remuneration. It's interesting to note that Norwood Systems pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Norwood Systems Limited's Growth
Over the past three years, Norwood Systems Limited has seen its earnings per share (EPS) grow by 9.7% per year. Its revenue is down 22% over the previous year.
We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Norwood Systems Limited Been A Good Investment?
Most shareholders would probably be pleased with Norwood Systems Limited for providing a total return of 71% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 4 warning signs for Norwood Systems you should be aware of, and 2 of them are a bit concerning.
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.
