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Is Aeris Environmental Ltd's (ASX:AEI) CEO Being Overpaid?

Simply Wall St

Peter Bush became the CEO of Aeris Environmental Ltd (ASX:AEI) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Aeris Environmental

How Does Peter Bush's Compensation Compare With Similar Sized Companies?

According to our data, Aeris Environmental Ltd has a market capitalization of AU$49m, and pays its CEO total annual compensation worth AU$276k. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$240k. We looked at a group of companies with market capitalizations under AU$292m, and the median CEO total compensation was AU$370k.

That means Peter Bush receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Aeris Environmental, below.

ASX:AEI CEO Compensation, September 12th 2019

Is Aeris Environmental Ltd Growing?

Aeris Environmental Ltd has reduced its earnings per share by an average of 13% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 149% over the last year.

Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Aeris Environmental Ltd Been A Good Investment?

With a three year total loss of 47%, Aeris Environmental Ltd would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Remuneration for Peter Bush is close enough to the median pay for a CEO of a similar sized company .

We would like to see somewhat stronger per share growth. And shareholder returns have been disappointing over the last three years. So many would argue that the CEO is certainly not underpaid. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Aeris Environmental.

Important note: Aeris Environmental may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.