Acrux Limited's (ASX:ACR) CEO Will Probably Find It Hard To See A Huge Raise This Year
Key Insights
Acrux will host its Annual General Meeting on 28th of November
Salary of AU$462.7k is part of CEO Michael Kotsanis's total remuneration
Total compensation is similar to the industry average
Acrux's EPS grew by 45% over the past three years while total shareholder loss over the past three years was 77%
In the past three years, the share price of Acrux Limited (ASX:ACR) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 28th of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
See 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$12m, and reported total annual CEO compensation of AU$710k for the year to June 2023. That's a fairly small increase of 6.0% over the previous year. We note that the salary portion, which stands at AU$462.7k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the Australian Pharmaceuticals industry with market capitalizations under AU$305m, the reported median total CEO compensation was AU$647k. This suggests that Acrux remunerates its CEO largely in line with the industry average.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$463k | AU$446k | 65% |
Other | AU$248k | AU$224k | 35% |
Total Compensation | AU$710k | AU$670k | 100% |
On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. Acrux is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Acrux Limited's Growth Numbers
Acrux Limited has seen its earnings per share (EPS) increase by 45% a year over the past three years. In the last year, its revenue is up 390%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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?
The return of -77% over three years would not have pleased Acrux Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid 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. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Acrux that investors should be aware of in a dynamic business environment.
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.
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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.
