Yahoo Finance This Is Why AuMake Limited's (ASX:AUK) CEO Compensation Looks Appropriate
Shareholders may be wondering what CEO Joshua Zhou plans to do to improve the less than great performance at AuMake Limited (ASX:AUK) recently. At the next AGM coming up on 22 November 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.
View our latest analysis for AuMake
Comparing AuMake Limited's CEO Compensation With the industry
According to our data, AuMake Limited has a market capitalization of AU$13m, and paid its CEO total annual compensation worth AU$373k over the year to June 2021. We note that's an increase of 51% above last year. We note that the salary portion, which stands at AU$307.5k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$273m, we found that the median total CEO compensation was AU$1.0m. That is to say, Joshua Zhou is paid under the industry median. Moreover, Joshua Zhou also holds AU$1.3m worth of AuMake stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$307k | AU$228k | 82% |
Other | AU$66k | AU$20k | 18% |
Total Compensation | AU$373k | AU$247k | 100% |
Talking in terms of the industry, salary represented approximately 38% of total compensation out of all the companies we analyzed, while other remuneration made up 62% of the pie. AuMake is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
AuMake Limited's Growth
Over the past three years, AuMake Limited has seen its earnings per share (EPS) grow by 18% per year. In the last year, its revenue is down 79%.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has AuMake Limited Been A Good Investment?
With a total shareholder return of -92% over three years, AuMake Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
The loss to shareholders over the past three years is certainly concerning. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.
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 5 warning signs (and 4 which make us uncomfortable) in AuMake we think you should know about.
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. 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.
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