In the past three years, the share price of Clover Corporation Limited (ASX:CLV) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 24 November 2022 will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

See our latest analysis for Clover

Comparing Clover Corporation Limited's CEO Compensation With The Industry

Our data indicates that Clover Corporation Limited has a market capitalization of AU$206m, and total annual CEO compensation was reported as AU$664k for the year to June 2022. Notably, that's an increase of 10% over the year before. We note that the salary portion, which stands at AU$475.9k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under AU$296m, the reported median total CEO compensation was AU$346k. Accordingly, our analysis reveals that Clover Corporation Limited pays Peter Davey north of the industry median. Furthermore, Peter Davey directly owns AU$649k worth of shares in the company.

Component 2022 2021 Proportion (2022) Salary AU$476k AU$454k 72% Other AU$188k AU$149k 28% Total Compensation AU$664k AU$602k 100%

Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. Clover 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. ceo-compensation

Clover Corporation Limited's Growth

Over the last three years, Clover Corporation Limited has shrunk its earnings per share by 11% per year. In the last year, its revenue is up 17%.



Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Clover Corporation Limited Been A Good Investment?

The return of -57% over three years would not have pleased Clover Corporation Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. Shareholders will get the chance at the upcoming AGM 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.

So you may want to check if insiders are buying Clover shares with their own money (free access).

Important note: Clover 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.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here