Key Insights

• Serko's Annual General Meeting to take place on 18th of June

• Salary of NZ$439.2k is part of CEO Darrin Grafton's total remuneration

• The total compensation is similar to the average for the industry

• Serko's three-year loss to shareholders was 59% while its EPS grew by 25% over the past three years

In the past three years, the share price of Serko Limited (NZSE:SKO) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 18th of June. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Serko

Comparing Serko Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Serko Limited has a market capitalization of NZ$364m, and reported total annual CEO compensation of NZ$1.0m for the year to March 2024. That's a fairly small increase of 3.7% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at NZ$439k.

For comparison, other companies in the New Zealand Software industry with market capitalizations ranging between NZ$163m and NZ$653m had a median total CEO compensation of NZ$1.1m. So it looks like Serko compensates Darrin Grafton in line with the median for the industry. Furthermore, Darrin Grafton directly owns NZ$37m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. In Serko's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Serko Limited's Growth Numbers

Serko Limited's earnings per share (EPS) grew 25% per year over the last three years. In the last year, its revenue is up 48%.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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.