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Kerry Plowright is the CEO of Aeeris Limited (ASX:AER), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Aeeris pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Aeeris Limited's CEO Compensation With the industry
Our data indicates that Aeeris Limited has a market capitalization of AU$6.6m, and total annual CEO compensation was reported as AU$173k for the year to June 2020. That's a notable increase of 27% on last year. In particular, the salary of AU$126.2k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$275m, we found that the median total CEO compensation was AU$327k. Accordingly, Aeeris pays its CEO under the industry median. Moreover, Kerry Plowright also holds AU$2.1m worth of Aeeris stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 73% of total compensation represents salary and 27% is other remuneration. There isn't a significant difference between Aeeris and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Aeeris Limited's Growth Numbers
Aeeris Limited has seen its earnings per share (EPS) increase by 89% a year over the past three years. It achieved revenue growth of 2.3% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Aeeris Limited Been A Good Investment?
Most shareholders would probably be pleased with Aeeris Limited for providing a total return of 129% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As previously discussed, Kerry is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Kerry's performance.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Aeeris (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. 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.
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