Is ALS Limited's (ASX:ALQ) CEO Paid Enough Relative To Peers?
Raj Naran has been the CEO of ALS Limited (ASX:ALQ) since 2017. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
See our latest analysis for ALS
How Does Raj Naran's Compensation Compare With Similar Sized Companies?
According to our data, ALS Limited has a market capitalization of AU$4.8b, and paid its CEO total annual compensation worth AU$2.9m over the year to March 2019. While we always look at total compensation first, we note that the salary component is less, at AU$1.5m. We examined companies with market caps from AU$3.0b to AU$9.6b, and discovered that the median CEO total compensation of that group was AU$3.3m.
That means Raj Naran receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at ALS has changed over time.
Is ALS Limited Growing?
Over the last three years ALS Limited has grown its earnings per share (EPS) by an average of 75% per year (using a line of best fit). It achieved revenue growth of 13% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. It could be important to check this free visual depiction of what analysts expect for the future.
Has ALS Limited Been A Good Investment?
Most shareholders would probably be pleased with ALS Limited for providing a total return of 81% 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...
Remuneration for Raj Naran is close enough to the median pay for a CEO of a similar sized company .
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! So you may want to check if insiders are buying ALS shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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