Yahoo Finance A Look At Acrux's (ASX:ACR) CEO Remuneration
Michael Kotsanis became the CEO of Acrux Limited (ASX:ACR) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Acrux
Comparing Acrux Limited's CEO Compensation With the industry
Our data indicates that Acrux Limited has a market capitalization of AU$30m, and total annual CEO compensation was reported as AU$510k for the year to June 2020. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at AU$460.7k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$271m, reported a median total CEO compensation of AU$413k. This suggests that Acrux remunerates its CEO largely in line with the industry average. Furthermore, Michael Kotsanis directly owns AU$180k worth of shares in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$461k | AU$451k | 90% |
Other | AU$49k | AU$70k | 10% |
Total Compensation | AU$510k | AU$521k | 100% |
On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. According to our research, Acrux has allocated a higher percentage of pay to salary in comparison to the wider industry. 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.
Acrux Limited's Growth
Acrux Limited has reduced its earnings per share by 5.4% a year over the last three years. Its revenue is up 87% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Acrux Limited Been A Good Investment?
With a total shareholder return of 24% over three years, Acrux Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
As we touched on above, Acrux Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But revenue growth for the company has been quite positive recently. Meanwhile, we would have liked to see shareholder returns post more substantial growth. Additionally, shareholders would want to keep their eyes on EPS, since growth has been negative for the metric for the last three years. But we don't think the CEO compensation is a problem, although shareholders might want to see more growth before agreeing that Michael should get a raise.
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 Acrux (of which 2 can't be ignored!) 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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