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The underwhelming share price performance of PaySauce Limited (NZSE:PYS) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 22 September 2022 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for PaySauce

According to our data, PaySauce Limited has a market capitalization of NZ$41m, and paid its CEO total annual compensation worth NZ$213k over the year to March 2022. That's a notable increase of 19% on last year. Notably, the salary of NZ$213k is the entirety of the CEO compensation.

In comparison with other companies in the industry with market capitalizations under NZ$335m, the reported median total CEO compensation was NZ$277k. So it looks like PaySauce compensates Asantha Wijeyeratne in line with the median for the industry. Furthermore, Asantha Wijeyeratne directly owns NZ$8.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. At the company level, PaySauce pays Asantha Wijeyeratne solely through a salary, preferring to go down a conventional route. 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.

Over the past three years, PaySauce Limited has seen its earnings per share (EPS) grow by 47% per year. It achieved revenue growth of 60% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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.

With a total shareholder return of -37% over three years, PaySauce Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

PaySauce pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 3 warning signs for PaySauce that investors should be aware of in a dynamic business environment.

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.

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.

Find out whether PaySauce is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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It's Probably Less Likely That PaySauce Limited's (NZSE:PYS) CEO Will See A Huge Pay Rise This Year - Simply Wall St