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This Is The Reason Why We Think AFT Pharmaceuticals Limited's (NZSE:AFT) CEO Deserves A Bump Up To Their Compensation

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The solid performance at AFT Pharmaceuticals Limited (NZSE:AFT) has been impressive and shareholders will probably be pleased to know that CEO Hartley Atkinson has delivered. This would be kept in mind at the upcoming AGM on 05 August 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

See our latest analysis for AFT Pharmaceuticals

Comparing AFT Pharmaceuticals Limited's CEO Compensation With the industry

Our data indicates that AFT Pharmaceuticals Limited has a market capitalization of NZ$476m, and total annual CEO compensation was reported as NZ$701k for the year to March 2021. We note that's an increase of 18% above last year. Notably, the salary which is NZ$506.1k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from NZ$285m to NZ$1.1b, we found that the median CEO total compensation was NZ$1.7m. That is to say, Hartley Atkinson is paid under the industry median. Furthermore, Hartley Atkinson directly owns NZ$332m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2021

2020

Proportion (2021)

Salary

NZ$506k

NZ$443k

72%

Other

NZ$195k

NZ$150k

28%

Total Compensation

NZ$701k

NZ$592k

100%

Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. Although there is a difference in how total compensation is set, AFT Pharmaceuticals more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at AFT Pharmaceuticals Limited's Growth Numbers

AFT Pharmaceuticals Limited has seen its earnings per share (EPS) increase by 92% a year over the past three years. Its revenue is up 7.1% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has AFT Pharmaceuticals Limited Been A Good Investment?

Most shareholders would probably be pleased with AFT Pharmaceuticals Limited for providing a total return of 94% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for AFT Pharmaceuticals (2 are potentially serious!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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