Yahoo Finance Shareholders May Be More Conservative With Acrux Limited's (ASX:ACR) CEO Compensation For Now
Shareholders of Acrux Limited (ASX:ACR) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 22 November 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Acrux
How Does Total Compensation For Michael Kotsanis Compare With Other Companies In The Industry?
At the time of writing, our data shows that Acrux Limited has a market capitalization of AU$35m, and reported total annual CEO compensation of AU$645k for the year to June 2021. We note that's an increase of 27% above last year. We note that the salary portion, which stands at AU$468.3k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$272m, the reported median total CEO compensation was AU$493k. Accordingly, our analysis reveals that Acrux Limited pays Michael Kotsanis north of the industry median. Moreover, Michael Kotsanis also holds AU$189k worth of Acrux stock directly under their own name.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$468k | AU$452k | 73% |
Other | AU$177k | AU$58k | 27% |
Total Compensation | AU$645k | AU$510k | 100% |
Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. Acrux is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Acrux Limited's Growth
Acrux Limited has seen its earnings per share (EPS) increase by 5.0% a year over the past three years. Its revenue is up 6.7% over the last year.
We'd prefer higher revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Acrux Limited Been A Good Investment?
With a total shareholder return of -34% over three years, Acrux Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 3 which make us uncomfortable) in Acrux we think you should know about.
Switching gears from Acrux, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
