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David Burton is the CEO of Compumedics Limited (ASX:CMP). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Compumedics

How Does David Burton's Compensation Compare With Similar Sized Companies?

Our data indicates that Compumedics Limited is worth AU$85m, and total annual CEO compensation is AU$250k. (This number is for the twelve months until June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$228k. We took a group of companies with market capitalizations below AU$284m, and calculated the median CEO total compensation to be AU$354k.

So David Burton receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at Compumedics has changed from year to year.

Is Compumedics Limited Growing?

Compumedics Limited has reduced its earnings per share by an average of 4.3% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 15% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. It could be important to check this free visual depiction of what analysts expect for the future.

Has Compumedics Limited Been A Good Investment?

With a total shareholder return of 21% over three years, Compumedics Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

David Burton is paid around what is normal the leaders of comparable size companies.

We feel that earnings per share have been a bit disappointing, but and we don't think the total returns are amazing. We wouldn't say the CEO pay is too high, but we'd venture the company should look to improve its business metrics (and share price) before paying any more. Shareholders may want to check for free if Compumedics insiders are buying or selling shares.

If you want to buy a stock that is better than Compumedics, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.