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Martin Barrett became the CEO of Auswide Bank Ltd (ASX:ABA) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Auswide Bank.
Comparing Auswide Bank Ltd's CEO Compensation With the industry
Our data indicates that Auswide Bank Ltd has a market capitalization of AU$251m, and total annual CEO compensation was reported as AU$750k for the year to June 2020. That's a slightly lower by 4.4% over the previous year. Notably, the salary which is AU$583.6k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations ranging from AU$137m to AU$548m, the reported median CEO total compensation was AU$1.1m. From this we gather that Martin Barrett is paid around the median for CEOs in the industry. What's more, Martin Barrett holds AU$1.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. There isn't a significant difference between Auswide Bank and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Auswide Bank Ltd's Growth Numbers
Auswide Bank Ltd's earnings per share (EPS) grew 5.0% per year over the last three years. It achieved revenue growth of 7.1% over the last year.
We'd prefer higher revenue growth, but the modest improvement in EPS is good. Considering these factors we'd say performance has been pretty decent, though not amazing. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Auswide Bank Ltd Been A Good Investment?
With a total shareholder return of 32% over three years, Auswide Bank Ltd shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we noted earlier, Auswide Bank pays its CEO in line with similar-sized companies belonging to the same industry. But the company has failed to produce substantial growth in either EPS or total shareholder return. So, although the CEO compensation seems reasonable, shareholders might want to see some further progress before they agree that Martin should get a raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Auswide Bank that investors should think about before committing capital to this stock.
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. 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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