Shareholders of Pengana Capital Group Limited (ASX:PCG) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 26 October 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Pengana Capital Group

How Does Total Compensation For Russel Pillemer Compare With Other Companies In The Industry?

According to our data, Pengana Capital Group Limited has a market capitalization of AU$172m, and paid its CEO total annual compensation worth AU$636k over the year to June 2021. This means that the compensation hasn't changed much from last year. In particular, the salary of AU$580.6k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under AU$268m, the reported median total CEO compensation was AU$434k. Accordingly, our analysis reveals that Pengana Capital Group Limited pays Russel Pillemer north of the industry median. What's more, Russel Pillemer holds AU$30m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component 2021 2020 Proportion (2021) Salary AU$581k AU$564k 91% Other AU$56k AU$73k 9% Total Compensation AU$636k AU$638k 100%

On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. Pengana Capital Group pays out 91% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

 ceo-compensation

Pengana Capital Group Limited's Growth

Over the past three years, Pengana Capital Group Limited has seen its earnings per share (EPS) grow by 5.1% per year. Its revenue is up 58% over the last year.

We like the look of the strong year-on-year improvement in revenue. And in that context, the modest EPS improvement certainly isn't shabby. We wouldn't say this is necessarily top notch growth, but it is certainly promising. 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 Pengana Capital Group Limited Been A Good Investment?

With a three year total loss of 18% for the shareholders, Pengana Capital Group Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 3 warning signs for Pengana Capital Group that investors should look into moving forward.

Switching gears from Pengana Capital Group, if you're hunting for a pristine balance sheet and premium returns, this freelist of high return, low debt companies is a great place to look.

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.

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